This article examines the effect of the Prices Justification Tribunal (PJT) on the macroeconomic performance of the economy. It also seeks to link up dis cussions of the PJT with the Arbitration Commission's wage indexation experi ment. It is concluded that both the PJT and wage indexation are perverse, and that the major reason for the PJT's continued existence is "political" in that it helps to ensure trade union acceptance of wage restraint (i.e. wage indexation). The article concludes with a new policy recommendation which would funda mentally alter the approach of the PJT to prices justification.
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