Re:More money than anyone imagined: an explanation for why t...
by lkrubner on Sunday July 28, 2019 @11:42PM
(#20551363)
You are mistaken. The Phillips Curve suggests that low unemployment leads to higher inflation, whereas I wrote that low unemployment leads to higher wages. What I wrote is a simple assertion of supply and demand: if labor is in more demand, then the price of labor should go up. The Phillips Curve suggests a different relationship, and is unrelated to what I wrote.
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Re:More money than anyone imagined: an explanation for why t...
by cbanek on Monday July 29, 2019 @02:46AM
(#20552042)
I don't believe I'm mistaken. From the first few sentences of the page I linked to, it says exactly what you said:
Wikipedia:
> Stated simply, decreased unemployment, (i.e., increased levels of employment) in an economy will correlate with higher rates of wage rises.[1] Phillips did not himself state there was any relationship between employment and inflation; this notion was a trivial deduction from his statistical findings.
You:
> whereas I wrote that low unemployment leads to higher wages
I made the "trivial deduction":
If low unemployment leads to higher wages, it means that the prices for the things those people are producing (with higher wages), are going up, or inflating. That, or profit margins for the company are decreasing, if prices are kept stable.