TY  - JOUR
AU  - Ball,Laurence
AU  - Moffitt,Robert
TI  - Productivity Growth and the Phillips Curve
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8421
PY  - 2001
Y2  - August 2001
UR  - http://www.nber.org/papers/w8421
L1  - http://www.nber.org/papers/w8421.pdf
N1  - Author contact info:
Laurence M. Ball
Department of Economics
Johns Hopkins University
Baltimore, MD 21218
Tel: 410/516-7605
Fax: 410/516-7600
E-Mail: lball@jhu.edu

Robert A. Moffitt
Department of Economics
Johns Hopkins University
3400 North Charles Street
Baltimore, MD  21218
Tel: 410/516-7611
Fax: 410/516-7600
E-Mail: moffitt@jhu.edu
AB  - We present a model in which workers' aspirations for wage increases adjust slowly to shifts in productivity growth.  The model yields a Phillips curve with a new variable: the gap between productivity growth and an average of past wage growth. Empirically, this variable shows up strongly in the U.S. Phillips curve.  Including it explains the otherwise puzzling shift in the unemployment-inflation tradeoff since 1995.
ER  -