APPENDIX B
The Effect of New Keynesian Demand Management Combined with WageSettlements Aimed at (1) an Over-Ambitious Standard of Living or (2) the Promotion of Employment
Throughout this appendix we assume that there is a New Keynesian demand-management policy which keeps the total money demand for labour on a fixed annual growth path. (1) In Section I we combine this with the type of wage-fixing arrangements that we described in Appendix A, namely, money wage claims aimed at the achievement of a certain level of real wage income. (2) In Section II we combine it with wage-fixing arrangements under which wage rates are set so as to maintain levels of employment.
A major result of the simple models examined in this appendix is that there is a ...
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