6 
will then be lower than expected, and if the target is 
unchanged the nominell wage demanded in the next round will 
be growing more than before. It seems to me that in principle 
(i.e. if materials etc rise in proportion to wages) this 
effect must cumulate over successive rounds of wage 
negotiations. 
Let us look at the data of ILB + II.C. The real wage growth 
has everywhere gone back under the influence of unemployment; 
Evidently real wage targets have been reduced. In spite of 
this the growth of money wages has almost every where 
accelerated. The reason is that in the transmission of wages 
into prices various influences have come in which prevented 
a price increase in proportion to the wage increase. These 
were mainly the two oil shocks and the decline in productivity 
growth. 
As long as this corresponded to the increase in money wages, 
as for example in the U.S. in 1961—67 (Table II.A, II.B, II.D), 
there was no reason for accelerated inflation, while since 
then there has been such an effect in spite of reduced real 
wage targets. 
The inflation stimulus will be larger if industry tries to 
shift also the fixed cost elements.