Wages, Inflation and the Labor Market

  • Edward J. Nell


The revival of the approach of the Classics has resulted in a multiplier which implies that an increase in the real wage will increase employment. This requires a close examination of the labor market. But the real wage is a composite construct — it is the money wage divided by the money price of consumer goods. These money variables can move independently of one another, and they do in inflationary processes. We must therefore explore inflation as a wage—price spiral, in which money wages and prices, moving at different rates, change distribution.


Labor Supply Real Wage Consumer Good Capital Good Excess Demand 
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  1. Nell, E. (1988) Prosperity and Public Spending (London: Unwin Hyman).Google Scholar
  2. Semmler, W. (1984) Competition, Monopoly and Differential Profit Rates (New York: Columbia University Press).Google Scholar
  3. Sylos-Labini, R. (1984) The Faces of Economic Growth and Decline (Cambridge, Mass.: MIT Press).Google Scholar

Copyright information

© Edward J. Nell 1992

Authors and Affiliations

  • Edward J. Nell
    • 1
  1. 1.New School for Social ResearchNew YorkUSA

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