Wages in the business cycle: An empirical and methodological analysis

Recent Books finance. The primary intention is to emphasize a model-building approach to selected policy-related problems in open economies. It uses the rational expectations method to anticipate economic trends and show how to develop stochastic models-using statistical patterns to predict trends-to develop rational, rigorous, and educational predictions. Unemployment and Labour Market Flexibility: The United Kingdom. Guy Standing. Washington, D.C.: International Labor Office, 1986. 147 pp. $17.10 ISBN 92-2-105291-5. Since the 197Os, unemployment has risen dramatically in the United Kingdom. This IL0 study concentrates on the link between unemployment and labor market flexibility during the 1979-1986 period. The context of the analysis is an examination of the Special Employment Measures adopted to check the growth of unemployment until supply-side measures could take effect. It concludes by considering strategies by which greater labor flexibility could be achieved, while increasing social security. Wages in the Business Cycle: An Empirical and Methodological Analysis. Jonathan Michie. London: Frances Pint, 1987. 194 pp. $29.50 ISBN O-86187-686-5. This book contests the 1985 British Treasury claim that a cut in wages would increase employment according to the cyclical behavior of wages. The author presents the results of his empirical work which illustrates the absence of any systematic empirical regularity to wage movements over the business cycle. He challenges the Keynesian theoretical assumptions by arguing in the context of the labor demand function theory.

323