§ Mr. Austin Mitchellasked the Chancellor of the Exchequer to what extent his simulation of the effect of real wages on employment is based on extrapolations from the past; and who has decided the direction of causation in interpreting correlations.
§ Mr. Peter ReesThe model on which the simulation was performed contains relationships for the demand for labour which were estimated using data from the past. A summary of the econometric evidence, including that used in the Treasury model, is provided in the Treasury paper, "The relationship between employment and wages", a copy of which is available in the House of Commons Library. The interpretation of the findings of the empirical research was the responsibility of Treasury officials.