ABSTRACT
In the wage equation used in the reruns of history to represent the needed reform of wage-fixing situations, it is assumed that money wage settlements are not directly affected by the rate of price inflation. But it is assumed that there is a critical unemployment percentage, at which there would be an upward pressure on money wage rates equal to the announced target rate of increase of total Money GDP of 13 per cent per annum. It is assumed that this critical rate remains constant throughout the period at 3.76 per cent (namely, the percentage unemployment inherited at the beginning of the exercise period). There is in fact no policy target for the unemployment percentage; but this critical rate of 3.76 per cent may take the place of such a target, since it represents what is assumed to be the level of frictional unemployment that, with our reformed wage-fixing institutions, would not exercise any downward pressure on money wage rates relative to the total expected national income.
