evidence: This brief uses historical estimates of the interdependent behavior, or joint dynamics, of prices, wages, and productivity to show that, despite the coincident increases, the sharp rise in wage growth since the end of the pandemic resulted in large part from abnormal inflation shocks and has not triggered a significant additional increase in inflation. Moreover, it documents that wages are still catching up to the inflation shocks that followed the onset of the pandemic, leaving some room for wage growth to exceed inflation without creating additional price pressures. [...] Our model estimates show that although wage growth has exceeded inflation in the last few quarters, it has not fueled additional inflation so far. This finding leads to the question of how much space wages have to catch up before they lead to additional inflationary pressures. To answer this question, we combine the findings from our model in the previous section with the projected effect of wage growth shocks on one-year-ahead core PCE and compute a forecast of the inflationary effect of hypothetical ECI growth for the fourth quarter of 2023.7