The Structuralist Perspective on Real Exchange Rate, Share Price Level and Employment Path: What Room Is Left for Money?

Author

Edmund S. Phelps, Columbia University
Hian Teck HOON, Singapore Management UniversityFollow
Gylfi ZOEGA, University of London

Publication Type

Working Paper

Version

publishedVersion

Publication Date

1-2004

Abstract

The current sluggish performance of the US economy follows one of the more remarkable booms in modern history. The late 1990s was a period of simultaneous output and productivity growth,1 low unemployment and stable inflation, culminating in an unemployment rate of only 3.9% in the fourth quarter of the year 2000. The absence of rising inflation during this period came as a surprise to many since the level of the natural rate of unemployment was commonly estimated to be in the range of 5-6% by the mid 1990s. The non-inflationary boom, however, reminds one of another episode where non-monetary forces were strongly at work, namely, the non-deflationary slump in Europe and elsewhere in the 1980s and 90s, which appeared to signal a move to a higher natural rate of unemployment. The modeling of such structural slumps and booms is the task that we have tackled in a number of papers in recent years, the book Structural Slumps being a major milestone.

Discipline

Finance | Macroeconomics | Public Economics

Research Areas

Macroeconomics

Volume

05-2004

First Page

1

Last Page

26

Publisher

SMU Economics and Statistics Working Paper Series, No. 05-2004

City or Country

Singapore

Citation

Phelps, Edmund S.; HOON, Hian Teck; and ZOEGA, Gylfi. The Structuralist Perspective on Real Exchange Rate, Share Price Level and Employment Path: What Room Is Left for Money?. (2004). 05-2004, 1-26.
Available at: https://ink.library.smu.edu.sg/soe_research/781

Copyright Owner and License

Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.