Unemployment, disequilibrium and the short run phillips curve: An econometric approach

The paper specifies a disequilibrium model for the aggregate labour market consisting of demand and supply functions for labour, an adjustment equation for wages as well as for prices, a transactions equation and, finally, an equation that relates measured unemployment to vacancies and to excess demand. The model has a more sophisticated treatment of dynamics than earlier disequilibrium models. The parameter estimates and the goodness‐of‐fit are satisfactory and the model's implications for the behaviour of several important variables are sensible. In particular, excess demand estimates computed in various ways are reasonable.