stronger bargaining position when they try to prevent a cut in money wages. If inflation is so low that some money wages have … to be cut, workers' stronger bargaining position requires higher unemployment in equilibrium. However, inflation is more … stable when money wage rigidity binds, providing an incentive for monetary policy makers to choose a low target for inflation …

Phillips-curve framework of low - often extremely low - response of inflation to unemployment could be the result of fairly … most Phillips-curve studies, that conclude that inflation has little relation to unemployment. We suggest that the flat …