Do Unions Cause Inflation?

THE most widely accepted position on the relation of wages to inflation is that there is a wage-price spiral. In this paper I will try to show why I do not agree with most of the implications of this position. The paper is organized in three main sections. The first deals with the effects of unions on the wages of their members, since these effects are thought to initiate the spiral. The second deals with the wage-price spiral concept directly. The third discusses the relations between the increase in prices and the level of unemployment.