ABSTRACT
The first of these problems is whether, in a predominantly capitalist world with some involuntary unemployment at going wage rates, a general rise in money and real wages will raise the overall level of employment, lower it, or leave it unaffected. (All three positions have strong supporters.)
The second problem is dynamic, and considers the relation between unemployment and money wage changes. Is there a stable inverse relationship-such as the Phillips curve of Chapter 10, section 14-between the unemployment level and the rate of increase of money wages? If so, does this relation preclude the simultaneous achievement of high employment and price-level stability without direct controls over prices and wages?
