Wages, Regime Switching, and Cycles

ISBN-13: 9783642772436 / Angielski / Miękka / 2011 / 171 str.

Piero Ferri; Edward Greenberg

Opis

The initial purposes of this book were to update and extend the discussion and the results presented ill our previous book, The Labor Market and Business Cycle Theories. Our 1990 article, which appeared in The Journal of Economic Behavior and Organization, represented a first step in this direction. The consequences of this effort have materialized in a number of new chapters that has led de facto to a new book, in which the surviving parts have been largely revised. The 1989 book was too mathematically oriented for many Keynesians and post Keynesians to be fully appreciated and insufficiently microfounded for both new classicals and new-Keynesians to be warmly accepted, yet we received positive and encouraging comments, and it was sold out very quickly. It was an attempt to dis cuss dynamics in Keynesian terms, based on a double assumption that maintains its validity-that both economic facts and analytical and methodological innova tions had contributed to a renewed interest in business cycles, which over time has had its "ups and downs." Since then, many more articles and books have appeared, stressing in particular the role of microfoundations and of nonlinearities in shaping business cycle theory."

Spis treści

I Introduction.- 1 An Overall View.- 1.1 Scope and Objectives.- 1.2 The Revival of Business Cycle Theories.- 1.3 An Historical Outline.- 1.4 Facts and Theories.- 1.5 Nonlinearities and Business Cycles.- 1.6 The Role of the Labor Market in Business Cycles.- 1.7 The Regime-Switching Approach.- 1.8 Plan of the Book.- 1.9 References.- II The Business Cycle.- 2 Basic Concepts in the Theory of Cycles.- 2.1 Defining the Business Cycle.- 2.2 Does the Business Cycle Exist?.- 2.3 Trends and Cycles.- 2.4 The Asymmetries.- 2.5 Stylized Facts of the Labor Market.- 2.6 Has the Business Cycle Changed?.- 2.7 Long-run Forces and Changing Institutional Settings.- 2.8 References.- 3 Microfounded Exogenous Explanations.- 3.1 Stochastic and Exogenous Theories.- 3.2 Linear Macroeconometric Models.- 3.3 The Econometric Evidence.- 3.4 Real and Monetary Factors.- 3.5 Lucas’s Contribution.- 3.6 The Labor Market and Market Clearing.- 3.7 Real Business Cycle Theories.- 3.8 Search Models and the Business Cycle.- 3.9 Methodological Issues and Conclusions.- 3.10 References.- 4 Nonlinear Deterministic Theories.- 4.1 Endogenous and Deterministic Theories.- 4.2 Old and New Tools of Analysis.- 4.3 Ceilings and Floors.- 4.4 Nonlinearities and the Labor Market.- 4.5 An Eclectic Model.- 4.6 A Classical Nonlinear Model.- 4.7 An Intermediate-run Model.- 4.8 Chaotic Behavior.- 4.9 Concluding Remarks.- 4.10 References.- III Wages and Prices.- 5 The Dynamic Role of Wages and Prices.- 5.1 Two Perspectives.- 5.2 Inflation and Hyperinflation.- 5.3 The Dimensionality of the Wage-Price Subsystem.- 5.4 Wages and Prices in a Business Cycle Perspective.- 5.5 Defining Rigidities.- 5.6 The Wage-Price Spiral with Rational Expectations.- 5.7 Rigidities and the Impact on Cycles.- 5.8 References.- 6 The Phillips Curve Debate.- 6.1 Two Parallel Debates.- 6.2 Facts and Theories.- 6.3 The Phillips Curve.- 6.4 The Tradeoff Curve.- 6.5 Search Theories, Misperceptions, and Rationality.- 6.6 The Real Wage Resistance Hypothesis.- 6.7 The Wage Equation in Real Terms.- 6.8 An Imperfect Competition Model.- 6.9 The Three Empirical Dimensions of Stickiness.- 6.10 The Phillips Curve after the Lucas Critique.- 6.11 References.- 7 Microfoundations of Labor Market Modeling.- 7.1 The Search for a Theoretical Foundation of Rigidities.- 7.2 Keynes’s Three Questions.- 7.3 New-Keynesian Economics.- 7.4 The Theory of Efficiency Wages.- 7.5 Bargaining Theories.- 7.6 The Insider-Outsider Model.- 7.7 A Critical Assessment of Real Rigidity Theories.- 7.8 Nominal Rigidities.- 7.9 The Interdependence of Nominal and Real Rigidities.- 7.10 Noncompetitive labor markets and wage norms.- 7.11 The Indeterminacy Theorem.- 7.12 References.- IV Regime Switching.- 8 The Economics of Regime Switching.- 8.1 Introduction.- 8.2 A Definition.- 8.3 The Nature of a Regime.- 8.4 The Two Regimes in the General Theory.- 8.5 Regime Switching in Kalecki’s Analysis.- 8.6 Changes in Industrial Relations.- 8.7 Rowthorn’s Model.- 8.8 Toward Economic Justification.- 8.9 Three Possible Justifications.- 8.10 Regime Switching and Multiple Equilibria.- 8.11 The Time Dimension.- 8.12 References.- 9 Regime Switching and the Wage-Price Spiral.- 9.1 Dynamics in an Intermediate-Run Model.- 9.2 A Regime-Switching Model.- 9.3 The Employment Subsystem.- 9.4 Exogeneity in Real Terms.- 9.5 Exogeneity in Nominal Terms.- 9.6 An Extension of the Model.- 9.7 The Role of Technical Change.- 9.8 Concluding Remarks.- 9.9 References.- 10 Inflation and Real Wages.- 10.1 Introduction.- 10.2 A Small Scale Macroeconomic Model.- 10.3 A Regime Switching Model.- 10.4 An Empirical Study of Regime Switching.- 10.5 The Working of the Model.- 10.6 Further Discussion of the Model.- 10.7 Summary and Conclusions.- 10.8 References.- V Concluding Remarks.- 11 An Assessment.- 11.1 Introduction.- 11.2 A Reconsideration of Regime Switching.- 11.3 Comparison with other Nonlinear Models.- 11.4 Microfoundation versus Justification.- 11.5 Ss Rules and the Stochastic Approach.- 11.6 Business Cycle Theory and the Labor Market.- 11.7 Towards Future Research.- 11.8 References.