Relative wage setting, contracts and unemployment during the deflations of 1920-22 and 1931-34 in Sweden
AbstractRecent research on the Great Depression has concluded that a worldwide decline in aggregate demand, emanating from the United States, was propagated into a fall in real activity through sticky nominal wages. The question remains: Why were nominal wages so sticky? I examine two hypotheses based on relative wage setting. Based on a wide range of evidence for Sweden, I argue that the 1920-22 depression is compatible with the staggered wage contract model and the 1930s depression with the co-ordination failure model.
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Bibliographic InfoPaper provided by Lund University, Department of Economics in its series Working Papers with number 1999:2.
Length: 43 pages
Date of creation: 04 Mar 1999
Date of revision: 21 Apr 1999
Publication status: Published in Deflation. Current and historical perspectives., Burdekin, Richard, Siklos, Pierre (eds.), 2004, chapter 4, pages 91-130, Cambridge University Press.
Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
More information through EDIRC
Wage contracts; Fischer-Taylor model; unemployment; Sweden; Depression; relative wage setting;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-05-03 (All new papers)
- NEP-HIS-1999-05-03 (Business, Economic & Financial History)
- NEP-LAB-1999-05-03 (Labour Economics)
- NEP-LTV-1999-09-05 (Unemployment, Inequality & Poverty)
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