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Rational Expectations and Labour Market Equilibrium in Britain 1855-1913

Hatton, T (1984) Rational Expectations and Labour Market Equilibrium in Britain 1855-1913. UNSPECIFIED. CEPR Discussion Papers.

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Abstract

This paper tests a two equation model of supply and demand for labour for 1857-1913, the period which was the focus of the original Phillips curve study. The basic structure is an equilibrium model of the labour market with 'classical' characteristics arising from a surprise supply function and the assumption that expectations are formed rationally i. e. in a way consistent with the model itself. Tests of exclusion restrictions on a general reduced form tend to weakly reject these joint hypotheses. Tests on a structural model reject unanticipated wage change in a favour of actual wage change as the appropriate variable in the supply function. This gives support to the original Phillips curve formulation.

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: Britain; Labour Markets; Phillips Curve; Rational Expectations
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 19 Jul 2012 13:03
Last Modified: 17 Aug 2017 18:09
URI: http://repository.essex.ac.uk/id/eprint/3368

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