Sammendrag
We contrast two alternative approaches to the analysis of price behaviour over the business cycle: the ``stylized facts'' methodology and econometric models. Using the ``stylized facts'' apparatus on United Kingdom and Norwegian data, we find that the relationships between wages and unemployment, are unstable over even short sample periods. We design two small wage--price models for the United Kingdom and Norway that appear constant, interpretable, data coherent and that can account for the instabilities of the ``stylized facts'' correlations. Simulation is used to show that even when underlying behaviour is constant, we can expect to observe quite different correlations of macroeconomic variables over the business cycle, hence we encompass the result of the ``stylized facts'' analysis.
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