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Sticky wages and the Great Depression: evidence from the United Kingdom

Lennard, Jason ORCID: 0000-0002-6700-8969 (2023) Sticky wages and the Great Depression: evidence from the United Kingdom. European Review of Economic History, 27 (2). 196 - 222. ISSN 1361-4916

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Identification Number: 10.1093/ereh/heac014


How sticky were wages during the Great Depression? Although classic accounts emphasise 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 changed infrequently but that wage cuts were more common than wage rises on average. Nominal wage adjustment fluctuated over time and by state, so that in 1931 amid falling output and prices more than one-third of workers received wage cuts.

Item Type: Article
Official URL:
Additional Information: © 2022 The Author
Divisions: Economic History
Subjects: H Social Sciences > HB Economic Theory
D History General and Old World > D History (General)
JEL classification: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E30 - General
N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N14 - Europe: 1913-
Date Deposited: 14 Nov 2022 14:51
Last Modified: 16 Jun 2024 21:30

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