Equilibrium unemployment: Theory and measurement in Australia using the Phillips curve

Economic Record

Volumn 78, Issue 243, 2002, Pages 451-470

  McDonald, Ian M ^a  

^a UNIVERSITY OF MELBOURNE   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

LABOR MARKET; THEORETICAL STUDY; UNEMPLOYMENT; WAGE DETERMINATION;

AUSTRALIA;

EID: 0036909089     PISSN: 00130249     EISSN: None     Source Type: Journal    
DOI: 10.1111/1475-4932.00071     Document Type: Article

References (63)

1. Barro, R.J. and Gordon, D.B. (1983), 'A positive theory of monetary policy in a natural rate model', Journal of Political Economy 91, 589-610.
2. Bean, C.R. (1994), 'European unemployment: a survey', Journal of Economic Literature 32, 573-619.
3. Bean, C., Layard, R. and Nickell, S. (1986), 'The rise in unemployment: a multi-country study', Economica 53, S1-S22.
4. Bhaskar, V. (1990), 'Wage relativities and the natural rate of unemployment', Economic Journal 100, 60-6.
5. Binmore, K., Rubinstein, A. and Wolinsky, A. (1986), 'The Nash bargaining solution in economic modelling', Rand Journal of Economics 17, 176-88.
6. Blanchard, O.J. and Fischer, S. (1989), Lectures in Macroeconomics. MIT Press, Cambridge.
7. Blanchard, O. and Summers, L. (1986), 'Hysteresis and the European unemployment problem', NBER Macroeconomics Annual, MIT Press, Cambridge; 15-77.
8. Challen, D.W. and Hagger, A. (1975), 'Another look at Australia's inflation-unemployment trade-offs', Australian Economic Papers 14, 137-53.
9. Clark, A. and Oswald, A. (1994), Unhappiness and unemployment', Economic Journal 104, 648-59.
10. Clark, P.B. and Laxton, D. (1997), 'Phillips curves, Phillips lines and the unemployment costs of overheating', IMF Working Papers, 97/17, International Monetary Fund, Washington D.C.
11. Creedy, J. and McDonald, I.M. (1991), 'Models of trade union behaviour: A synthesis', Economic Record, 67, 346-59.
12. Crosby, M. and Olekalns, N. (1998), 'Inflation, unemployment and the NAIRU in Australia', Australian Economic Review 31, 117-29.
13. Dawkins, P. and Wooden, M. (1985), 'Labour utilization and wage inflation in Australia: an empirical examination', Economic Record 24, 516-21.
14. De Long, J.B. and Summers, L.H. (1986), 'Is increased price flexibility stabilizing?', American Economic Review 76, 1031-44.
15. Debelle, G. and Laxton D. (1997), 'Is the Phillips curve a curve?: Some evidence for Canada, New Zealand and the United States', IMF Staff Papers 44, 249-82.
16. Debelle, G. and Vickery, J. (1998), 'Is the Phillips curve a curve? Some evidence and implications for Australia', Economic Record 74, 384-98.
17. Driscoll, J.C. and Holden, S. (2001), 'Fair treatment and inflation persistence', available at http://folk.uio.no/sholden/#wp.
18. Flatau, P. and Hemmings, P. (1993), 'The cost of high and long term unemployment', Australian Economic Review 93, 69-84.
19. Friedman, M. (1968), 'The role of monetary policy', American Economic Review 58, 1-17.
20. Gregory, R.G. (1986), 'Wages policy and unemployment in Australia', Economica 53, S53-S74.
21. Groenewold, N. and Hagger, A.J. (1998), 'The natural rate in Australia since the seventies', Economic Record 74, 24-35.
22. Gruen, D., Pagan, A. and Thompson, C. (1999), 'The Phillips curve in Australia', Journal of Monetary Economics 44, 235-58.
23. Hahn, F. and Solow, R. (1995), 'A Critical Essay on Modern Macroeconomic Theory', MIT Press, Cambridge.
24. Horne, J. and McDonald, I.M. (1984), 'Rational expectations, gradual price adjustment and monetary policy in Australia', Australian Economic Papers 23, 79-90.
25. Hughes, B. (1980), Exit Full Employment, Angus and Robertson, Melbourne.
26. Kahneman, D., Knetsch, J. and Thaler, R. (1991), 'The endowment effect, loss aversion, and status quo bias: Anomalies', Journal of Economic Perspectives 5, 193-206.
27. Kirby, M. (1981), 'A variable expectations coefficient model of the Australian. Phillips curve', Australian Economic Papers 20, 351-8.
28. Layard, R., Nickell, S.J. and Jackman, R. (1991), Unemployment: Macroeconomic. Performance and the Labour Market, Oxford University Press, Oxford.
29. Lindbeck, A. and Snower, D.J. (1988), The Insider-Outsider Theory of Employment and Unemployment, MIT Press, Cambridge.
30. Lye, J. and McDonald, I.M. (2002), 'The effectiveness of incomes policies, enterprise bargaining and inflation targetting in Australia - an appraisal based on estimating a model of the range of equilibria', available at http://melbecon.unimelb.edu.au/staffprofile/imcdonald/ home.htmlunderRangeofEquilbria
31. Lye, J., McDonald, I.M. and Sibly, H. (2001), 'An estimate of the range of equilibrium rates of unemployment for Australia', Economic Record 77, 35-50.
32. McDonald, I.M. (1980), 'On the comparison of the stability implications of Marshallian and Walrasian adjustment schemes: Note', American Economic Review 70, 829-33.
33. McDonald, I.M. (1987), 'Customer markets, trade unions and stagflation', Economica, 54, 139-53.
34. McDonald, I.M. (1991), 'Insiders and trade union wage bargaining', Manchester School of Economics Social Studies, Vol. LIX, 395-407.
35. McDonald, I.M. (1996), Macroeconomics, 2nd edn. Jacaranda-Wiley, Brisbane.
36. McDonald, I.M. (1999), 'Can unemployment be reduced without violating the inflation target?', Australian Economic Review 32, 89-95.
37. McDonald, I.M. and Sibly, H. (2001a), 'How monetary policy can have permanent real effects with only temporary nominal rigidity', Scottish Journal of Political Economy 48, 532-46.
38. McDonald, I.M. and Sibly, H. (2001b), 'Reference pricing, inflation targeting and the non-inflationary expansion', available at
39. McDonald, I.M. and Solow, R.M. (1984), 'Union wage policies: Reply', American Economic Review 74, 759-61.
40. Mitchell, W.F. (1987), 'The NAIRU, structural imbalance and the macroequilibrium unemployment rate', Australian Economic Papers 26, 101-18.
41. Mortensen, D. (1970), 'A theory of wage and employment dynamics', in E. S. Phelps (ed.), Microeconomic Foundations of Employment and Inflation Theory, Macmillan, London, 167-211.
42. Ng, W.M. (1998) Asymmetric Effects of Output on Inflation in the Australian Economy, Mimeo. University of Melbourne, Melbourne.
43. OECD (1990), 'Modelling wages and prices for the smaller OECD countries, Working Paper no. 86', OECD, Paris.
44. Parkin, M. (1973), 'The short-run and long-run trade offs between inflation and unemployment in Australia', Australian Economic Papers 12, 127-44.
45. Parkin, M. (1976), 'Yet another look at Australia's short-run and long-run trade offs between inflation and unemployment', Australian Economic Papers 15, 127-44.
46. Parkin, M. and Bade, R. (1990), Macroeconomics and the Australian Economy. Allen & Unwin, North Sydney.
47. Phelps, E. (1967), 'Phillips curves, expectations of inflation and optimal unemployment over time', Economica XXXIV, 254-81.
48. Phillips, A.W. (1958), 'The relation between unemployment and the rate of change and the rate of change of money wage rates in the United Kingdom, 1861-1957'. Economica 25, 283-99.
49. Pissarides, C. (2000), Equilibrium Unemployment Theory, MIT Press, Cambridge.
50. Powell, A.A. and Murphy, C.W. (1995) Inside a Modern Macroeconometric Model; a Guide to the Murphy Model, 1st edn. Springer, Berlin.
51. Powell, A.A. and Murphy, C.W. (1997) Inside a Modern Macroeconometric Model; a Guide to the Murphy Model, 2nd edn. Springer, Berlin.
52. Rao, B.B. (1977), 'An analysis of the short and long run trade-offs between unemployment and inflation and estimates of the equilibrium steady state unemployment rate in Australia', Australian Economic Papers 16, 273-84.
53. Røed, K. (1997), 'Hysteresis in unemployment', Journal of Economic Surveys 11, 389-418.
54. Riach, P.A. and Richards, G.M. (1979), 'The lesson of the Cameron experiment', Australian Economic Papers 18, 21-35.
55. Sargan, J.D. (1964), 'Wages and prices in the United Kingdom: A study in econometric methodology', in P.E. Hart, G. Mills and J.K. Whitaker (eds), Econometric Analysis for National Economic Planning, Butterworths, London, 25-63.
56. Sargent, T.J. (1971), 'A note on the accelerationist controversy', Journal of Money, Credit and Banking, 3, 721-5.
57. Shapiro and Stiglitz, J. (1984), 'Equilibrium unemployment as a worker discipline device', American Economic Review 74, 433-44.
58. Simes, R. and Richardson, C. (1987), 'Wage determination in Australia', Economic Record 63, 144-55.
59. Staiger, D., Stock, J. and Watson, M. (1997), 'The NAIRU, unemployment and monetary policy', Journal of Economic Perspectives 11, 33-49.
60. Thaler, R.H. (1987), 'Anomalies: The January effect', Journal of Economic Perspectives 1, 197-201.
61. Tobin, J. (1975), 'Keynesian models of recession and depression', American Economic Review, 65, 195-202.
62. Webster, E. (1999), 'Labour market programs and the Australian Beveridge curve: 1978-97', Economic Record 75, 405-16.
63. Woglom, G. (1982), 'Underemployment equilibrium with rational expectations', Quarterly Journal of Economics 97, 89-107.