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Sticky Wages and the Great Depression: Evidence from the United Kingdom

Lennard, Jason LU (2021) In LSE Economic History Working Papers
Abstract
How sticky were wages during the Great Depression? Although classic accounts emphasize the importance of nominal rigidity in amplifying deflationary shocks, the evidence is limited. In this paper, I calculate the degree of nominal wage rigidity in the United Kingdom between the wars using new granular data covering millions of wages.

I find that nominal wages were more flexible downwards than in most modern economies, but that the frequency and magnitude of wage cuts were too low to fully offset
deflation.
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
in
LSE Economic History Working Papers
issue
332
language
English
LU publication?
yes
id
c7b926d7-7f2a-4117-993e-b2cdf2b0f8c6
alternative location
https://www.lse.ac.uk/Economic-History/Assets/Documents/WorkingPapers/Economic-History/2020/WP332.pdf
date added to LUP
2021-12-17 15:07:25
date last changed
2021-12-20 10:35:28
@misc{c7b926d7-7f2a-4117-993e-b2cdf2b0f8c6,
  abstract     = {{How sticky were wages during the Great Depression? Although classic accounts emphasize the importance of nominal rigidity in amplifying deflationary shocks, the evidence is limited. In this paper, I calculate the degree of nominal wage rigidity in the United Kingdom between the wars using new granular data covering millions of wages.<br/><br/>I find that nominal wages were more flexible downwards than in most modern economies, but that the frequency and magnitude of wage cuts were too low to fully offset<br/>deflation.<br/>}},
  author       = {{Lennard, Jason}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{332}},
  series       = {{LSE Economic History Working Papers}},
  title        = {{Sticky Wages and the Great Depression: Evidence from the United Kingdom}},
  url          = {{https://www.lse.ac.uk/Economic-History/Assets/Documents/WorkingPapers/Economic-History/2020/WP332.pdf}},
  year         = {{2021}},
}