71.   Generally speaking workers must decompose any given change in the real wage rate into a temporary component and a permanent component.

72.   The larger the temporary component of a real wage change, the more significant will be the response from the suppliers of labour.

73.   Presumably workers will have to derive a trend path for the growth in real wages and calculate temporary changes in real wages as deviations from this trend line.

74.   A significant part of the suspected increase in the real wage rate will be conceived of as a temporary increase, eliciting a substantial supply response from workers.

75.   If the real wage rate has temporarily risen, as workers are supposed to believe, employers will have the incentive to take on fewer workers.

76.   Only when employers perceive real wages to be abnormally low will they be prepared to take the workers up on their offer of extra labour.

77.   The consequent rise in the level of output raises the price level relative to the level of money wages, i.e. it reduces the real wage rate.

78.   Real wages and output rise in consequence.

79.   Workers face the signal extraction problem of deciding whether the increase in real wages is transitory or lasting.

80.   Where Keynes and Pigou parted company was in the mechanism through which the requisite decrease in real wages would occur.