Real approach to Phillips’ curve

Abstract

Since 1958, the year of Phillips’ paper «The Relation Between Unemployment and the Rate of Change In Money Wages in the United Kingdom, 1861-1957» publishing, a lot of modifications of the original Phillips’ curve have been made, whereas many of them have nearly nothing to do with the relationship described by original Phillips’ curve and they are rather inflation models or models of dynamic supply. It is the case of author’s «real» version of Phillips’ curve, which is derived in this paper, as well. Although «real» Phillips’ curve results from Phillips’ curve theory it describes a relationship between the labour productivity growth and the unemployment. The paper does not contain only the derivation of «real» Phillips’ curve, but also its empirical verification on the data bases of three developed countries, i.e. the USA, the United Kingdom and Denmark.