Abstract
This chapter is concerned with the macroeconomic role of wage inflation in the countries under review. In view of the general definition of inflation, wage inflation is to be understood as inflation (open and repressed) caused by excessive growth of the global wage-fund in relation to the rate of increase in the volume of goods and services on which the increment in wages is to be spent. The objective of this chapter therefore is to examine the contribution of wage growth to the generation of shortages of consumer goods and services and thus to open and/or repressed inflation.
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Notes
Having in mind such a situation some economists suggest linking average wage growth with production growth in consumer goods industries. See M. Toms and J. Fogl, Hospodářské noviny, no. 36, 1968.
See, e.g., A. Zverev, Voprosy ekonomiky, no. 11, 1962; Ökonomik der Arbeit in der DDR, 1963;
M. Derco and M. Kotlaba, Plánované hospodářství, no. 12, 1976 and
W. Krencik, Gospodarka planowa, no. 6, 1976.
E.g., in Czechoslovakia within the framework of the triple increase of production in the engineering industry, production for military purposes increased the most rapidly (it rose sevenfold). The production of machine-tools and steam and water turbines also increased considerably. Conversely, output of the engineering industry, earmarked for private consumption, decreased; (the production of passenger cars dropped by 70%, that of tractors by 38%, the production of shoemaking machines and machines for the leather industry fell by 72%.) (See V. Lukeš, K. Rybníkář, Plánované hospodářství, no. 12, 1968).
See B. Bukhanevich, Voprosy ekonomiku no. 8, 1972.
The mentioned increase in average wages was largely a result of increases in the minimum wage and in wage rates in some branches of industry. According to R. Batkaev (Sotsialisticheskii trud, no. 3, 1971) increases in wage rates accounted for one-third of the average wage increases in industry.
B. M. Sucharevskii, in Trud i zarabotnaia plata v SSSR, 1975, p. 229.
According to M. Kabaj (Gospodarka planowa, no. 2, 1978), in the period 1961–76 the growth of real wages in Polish industry amounted to 56% of productivity growth; (if the 1971–6 period of rapid wage increases is disregarded, then the coefficient was only 33%). On the other hand, in 1960–72 in twelve advanced capitalist countries, the growth of real wages was 91% of productivity growth.
See O. Kiss and V. Havránek, Finance a úvěr, no. 11, 1975.
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© 1979 Jan Adam
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Adam, J. (1979). Wages and Inflation—A Macroeconomic Analysis. In: Wage Control and Inflation in the Soviet Bloc Countries. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-04892-2_2
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DOI: https://doi.org/10.1007/978-1-349-04892-2_2
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