Wage Growth and Policy Paths

Analyze the channels through which persistent wage growth affects inflation dynamics, real incomes, productivity, and policy credibility in a mature economy. Compare scenarios in which wage growth accelerates inflation versus scenarios where gains outpace productivity without fueling inflation. Identify mechanisms such as wage-price pass-through, consumption demand, and fiscal implications, and outline actionable policy considerations for central banks, governments, and firms seeking durable, balanced growth over the long term.