The relationship between wage inflation and unemployment has been extensively investigated since the early work of Phillips (1958) and Lipsey (1960), and is still a matter of debate. In this paper we study the dynamics of a standard neoclassical labour market under Walrasian adjustment rules. We...

In this paper we develop a simple model of the labour market in the neoclassical framework dating back to Friedman (1968) and Phelps (1968), among others. According to the existing literature wage expectations should be formed in a different way by firms and individuals in order temporary...

In this paper we develop a simple model of the labour market in the neoclassical framework. According to the mainstream literature, dating back to, e.g., Friedman (1968) and Phelps (1968), only temporary deviations from the natural rate of employment may take place in the "expectations...