Why was there low unemployment in the 90s?

[Bradford DeLong]

>Bradford DeLong wrote:
>
>>Or, alternatively, that rapid aggregate productivity growth drove a 
>>wedge between the wage increases workers aspired to given low 
>>unemployment and the price increases firms needed to maintain and 
>>expand profits, and thus low unemployment was consistent with 
>>stable inflation...
>
>...except that profits peaked around 1997, as productivity was 
>accelerating, bringing the boom to an end.
>
>And the evidence is that productivity gains were concentrated in a 
>few industries - how does that translate into economy-wide wage 
>increases?

Productivity gains are as likely (more likely) to translate into 
lower prices than higher profits. The distribution of profits across 
industries has something but not a lot to do with the distribution of 
productivity...

Brad DeLong