What a puzzle! Unravelling why UK Phillips curves were unstable
The UK relationship between nominal wage inflation and the unemployment rate is unstable. Over sub-periods of the last 160 years of turbulent data, Phillips curve slopes range from strongly negative, slightly negative, flat, slightly positive and strongly positive. Our constant-parameter congruent m...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
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Wiley
2024
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| _version_ | 1826313590882172928 |
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| author | Castle, J Hendry, D |
| author_facet | Castle, J Hendry, D |
| author_sort | Castle, J |
| collection | OXFORD |
| description | The UK relationship between nominal wage inflation and the unemployment rate is unstable. Over sub-periods of the last 160 years of turbulent data, Phillips curve slopes range from strongly negative, slightly negative, flat, slightly positive and strongly positive. Our constant-parameter congruent model of real wages explains these instabilities, yet also implies a constant negative relationship between nominal wage inflation and the unemployment rate when corrected by its regressors. Disentangling these effects reveals that structural breaks in the real-wage model's variables do not explain the instabilities, which instead occur during sub-periods when some of its explanatory variables are insignificant. |
| first_indexed | 2024-04-09T03:59:04Z |
| format | Journal article |
| id | oxford-uuid:881dde7a-fa39-41a2-8b42-9aaedf1d4384 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-09-25T04:19:03Z |
| publishDate | 2024 |
| publisher | Wiley |
| record_format | dspace |
| spelling | oxford-uuid:881dde7a-fa39-41a2-8b42-9aaedf1d43842024-07-24T10:11:36ZWhat a puzzle! Unravelling why UK Phillips curves were unstableJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:881dde7a-fa39-41a2-8b42-9aaedf1d4384EnglishSymplectic ElementsWiley2024Castle, JHendry, DThe UK relationship between nominal wage inflation and the unemployment rate is unstable. Over sub-periods of the last 160 years of turbulent data, Phillips curve slopes range from strongly negative, slightly negative, flat, slightly positive and strongly positive. Our constant-parameter congruent model of real wages explains these instabilities, yet also implies a constant negative relationship between nominal wage inflation and the unemployment rate when corrected by its regressors. Disentangling these effects reveals that structural breaks in the real-wage model's variables do not explain the instabilities, which instead occur during sub-periods when some of its explanatory variables are insignificant. |
| spellingShingle | Castle, J Hendry, D What a puzzle! Unravelling why UK Phillips curves were unstable |
| title | What a puzzle! Unravelling why UK Phillips curves were unstable |
| title_full | What a puzzle! Unravelling why UK Phillips curves were unstable |
| title_fullStr | What a puzzle! Unravelling why UK Phillips curves were unstable |
| title_full_unstemmed | What a puzzle! Unravelling why UK Phillips curves were unstable |
| title_short | What a puzzle! Unravelling why UK Phillips curves were unstable |
| title_sort | what a puzzle unravelling why uk phillips curves were unstable |
| work_keys_str_mv | AT castlej whatapuzzleunravellingwhyukphillipscurveswereunstable AT hendryd whatapuzzleunravellingwhyukphillipscurveswereunstable |