THE EQUILIBRIUM LEVEL OF WAGES AND PRICES IN MACROECONOMICS
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Abstract
This paper provides an in-depth analysis of the equilibrium relationship between wages and prices in macroeconomics. The interaction between wage dynamics and price levels is a key determinant of inflation, unemployment, and overall economic stability. The study integrates classical, Keynesian, and modern macroeconomic theories, including expectations-augmented frameworks and policy analysis. The findings suggest that wage-price equilibrium is not static but evolves over time depending on aggregate demand, supply conditions, and institutional factors. Furthermore, the role of expectations and government intervention is shown to be crucial in stabilizing the economy.
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