Research Article Open Access

Long Cycles in Employment, Inflation and Real Unit Wage Costs, Qualitative Analysis and Quantitative Assessment

Peter Flaschel1, Goeran Kauermann1 and Timo Teuber1
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American Journal of Applied Sciences
Volume 2 No. 13, 2005, 69-77

DOI: https://doi.org/10.3844/ajassp.2005.69.77

Submitted On: 1 November 2005 Published On: 18 December 2005

How to Cite: Flaschel, P., Kauermann, G. & Teuber, T. (2005). Long Cycles in Employment, Inflation and Real Unit Wage Costs, Qualitative Analysis and Quantitative Assessment. American Journal of Applied Sciences, 2(13), 69-77. https://doi.org/10.3844/ajassp.2005.69.77

Abstract

This study provided some theoretical foundations for the empirical hypothesis. At first presented two simple prototype models of inflation, stagflation and disinflation. We concluded that there are cycles with a phase length much longer than the ordinary business cycle (in fact approximately five times as long as we saw in the empirical phase plots of the paper) which are not long waves from a Schumpeterian perspective, but caused by the fact that systematic changes in real unit-wage costs and also in inflation caused by changes in the (un-)employment rate may be slow, giving rise to interchanging long-lasting regimes of economic prosperity on the one hand and economic stagnation on the other hand.

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Keywords

  • Inflation
  • wage costs
  • qualitative analysis
  • quantitative assessment