ABSTRACT
Up to now we have regarded private money wage-rates as an externally determined variable which the State cannot control, and which is not immediately affected by changes in other variables in the economic system. Expressed in our terminology, money wage-rates are regarded as an uncontrollable parameter. In real life this corresponds to a situation where money wage-rates are determined by agreements between organizations in the labour market and where the results of wage negotiations cannot be ‘explained’ within the framework of an economic model. This treatment of money wages is not entirely satisfactory, however.
