The Changing Relationship between Productivity, Wages and Unemployment in the UK.

This paper uses time-series methods to analyze the changing relationship between unemployment, real wages, and productivity. Most economic models of the labor market, such as bargaining, search, contract, and efficiency wage theories, justify a relationship between these three variables. Only insider-outsider models cast doubt on any relationship at all between unemployment and wages. Copyright 1993 by Blackwell Publishing Ltd