As the proportion of labor contracts that index wages to prices declines,we would expect that

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When fewer labor contracts index wages to prices, changes in unemployment have a less direct impact on wages and thus on inflation, because wages are less automatically adjusted based on price changes. This means that a reduction in unemployment would not lead to as significant an increase in inflation as it might have when more contracts were indexed to prices.

As the Proportion of Labor Contracts That Index Wages to Prices