Pigou on the wage unit in Keynes

From Keynes’s ‘General Theory’: A retrospective view by A.C.Pigou (1950)

[…] Keynes uses for a measure a labour unit, in the sense of a unit of ordinary labour;  labour that is paid, for example, twice as high as ordinary labour being counted as two labour units (p. 41).  In so far as the relative rates of pay of different varieties and grades of labour remain constant, labour can be ‘made homogeneous’ by this device without any awkwardness.  But, in so far as that condition is not satisfied, the same index number problem that hampers the measurement of changes in real income has to be faced-or ignored.


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