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The L-shaped aggregate supply curve and the future of macroeconomics

Abstract:
The idea of the 'L-shaped aggregate supply curve', supposedly a feature of primitive macroeconomic models, is in fact a reasonable reconstruction of a well developed way of thinking that specifically denied a relation between wage change and aggregate employment. Neither that approach nor the idea of cost-push inflation to which it is related need be crude or superficial. Although the ideas in question were swept away by the Phillips curve, they have much merit and their reintroduction to mainstream macroeconomics might pay large dividends.
Publication status:
Published

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Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2010-05-01
Paper number:
486


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Pubs id:
1143939
Local pid:
pubs:1143939
Deposit date:
2020-12-15

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