Rosengren Sees Wages Rising in Tight Labor Market

The transcript discusses the complexities of inflation dynamics, questioning if there has been a permanent shift. It highlights wage growth and tight labor markets, referencing the Phillips curve model. Alternative explanations for low inflation, such as globalization and structural changes, are considered. The discussion concludes with the expectation that tight labor markets will eventually lead to wage and price increases.

Why is it considered unusual for tight labor markets to not result in wage and price increases?

In what ways might corporations respond to higher wages in terms of pricing strategies?