Chris Dillow — Real wages & inflation

It's true in the sense that lower oil prices raise the real incomes of oil consumers. It's also true that a surprise drop in inflation of the sort we've seen can temporarily raise real wages. 

However, in the longer-run, real wages aren't affected by inflation. If they were, we could achieve higher wages by (credibly) reducing the inflation target - but nobody believes this. 

Instead, real wages depend upon real things like productivity growth and workers' bargaining power, and these aren't much affected by inflation: at moderate levels of inflation, there's no link between inflation and GDP growth, for example.…

Stumbling and Mumbling
Real wages & inflation
Chris Dillow | Investors Chronicle

Lars P. Syll — Austerity is no liquidity trap solution

Mainstream neoclassical economists seem to think that there really isn’t any difference between solving a liquidity trap by lowering real wages via inflation or by lowering nominal wages.

But that is of course pure nonsense. Lowering real wages via inflation and lowering nominal wages aren’t equivalent measures.

As John Maynard Keynes wrote in General Theory (1936):

Lars P. Syll's Blog
Austerity is no liquidity trap solution
Lars P. Syll | Professor of Social Studies and Associate Professor of Economics, Malmo University