Premium
Modelling Aggregate Demand for Labour: A Reply to Dowrick and Wells *
Author(s) -
LEWIS PHILIP E.T.,
MACDONALD GARRY
Publication year - 2004
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.2004.00201.x
Subject(s) - economics , aggregate demand , point (geometry) , aggregate (composite) , mathematical economics , neoclassical economics , econometrics , keynesian economics , mathematics , monetary policy , materials science , geometry , composite material
Dowrick and Wells (2004) have attempted to point to what they see as a number of fundamental misinterpretations in a recent paper by Lewis and MacDonald (2002) estimating demand for labour in Australia. However, it is argued here that it is a particular assumption about a nominal price setting that leads to their results being different from that of the standard literature on labour demand. When the usual assumption are adopted, the results of Lewis and MacDonald (2002) hold and, therefore, are correct.