recent wage phillips curve and recessions

 "the basic relationship between wage growth and labor market slack breaks down
 during and after recessions."


" In each of the three recession most recent recessions
 wage growth slows much less than expected as the unemployment gap increases.
but then  Wage growth  continued to slow
long after the unemployment gap began  to normalize "

two phases.


"The first is the recessionary period, when the unemployment rate runs up, pushing up the unemployment gap. During this phase, wage growth declines less than its usual relationship with the unemployment gap would indicate."

" The second phase is the recovery. As the unemployment rate starts to decline during the labor market recovery, wage growth continues to decline. Consequently, during the early part of recoveries, labor market slack and wage growth move down together in a positive relationship, rather than the negative relationship that characterizes the average wage Phillips curve."

" The result is that recessions generate clockwise loops in the wage Phillips curve.
 These loops coincide with periods when the fraction of workers with no wage changes rises sharply"