Explain using macroeconomics models

Reference no: EM13721046

In the May 1 issue of the Wall Street Journal an article notes that private pay rose in the United States at the fastest pace in the first quarter of 2015 since 2008. Wages are expected to increase more during 2015 even while inflation remains low. Why do you think wages are increasing - explain using macroeconomics models. The Federal Reserve Chair, previously stated that the Fed is unlikely to increase interest rates until wage rates are showing consistent growth and inflation is at least 2%. Why do you think she combined wage rate growth and inflation as requirements for higher interest rates? Explain.

Reference no: EM13721046

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