Prices, Wages, and Employment in the U.S. Economy: A Traditional Model and Tests of Some Alternatives

  title={Prices, Wages, and Employment in the U.S. Economy: A Traditional Model and Tests of Some Alternatives},
  author={Albert. Ando and Flint Brayton},
  journal={Microeconomic Theory eJournal},
In this paper, we outline the cost minimizing behavior of oligopoly firms and the price adjustment process in the labor market which underlie the traditional formulation of aggregate wage-price behavior in the U.S., and show that resulting equations applied to U.S. data remain stable before and after the significant change in the monetary policy rule that had taken place in 1979. This result contradicts the prediction of the Lucas critique applied to this context that, in response to a major… 
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  • A. Rancan
  • Economics
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  • 2022
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