This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Spring 1998
  5. Real and Money Wage Rates

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Real and Money Wage Rates

  • John T. Dunlop
Journal of Economic Perspectives
vol. 12, no. 2, Spring 1998
(pp. 223–234)
Download Full Text PDF
(Complimentary)

Abstract

In the General Theory, John Maynard Keynes held money and real wage rates move in opposite directions. In expansion, prices increase faster because of increasing costs and a rise in the proportion of product going to profits. Neoclassical economists held similarly. Money illusion of workers supported their common view. The author's 1938 article rather showed a procyclical pattern, significant to macroeconomic models of the economy. Contemporary literature with new elements of compensation and new measures of wages supports a slightly procyclical relationship. Increased output and employment in expansion do not require lower real wages.

Citation

Dunlop, John T. 1998. "Real and Money Wage Rates." Journal of Economic Perspectives, 12 (2): 223–234. DOI: 10.1257/jep.12.2.223

JEL Classification

  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
There are no comments for this article.
Login to Comment