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

Jason Lennard

No 17018, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Great depression; Interwar britain; Nominal rigidity (search for similar items in EconPapers)
JEL-codes: E30 N14 (search for similar items in EconPapers)
Date: 2022-02
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Related works:
Journal Article: Sticky wages and the Great Depression: evidence from the United Kingdom (2023)
Working Paper: Sticky wages and the Great Depression: evidence from the United Kingdom (2023)
Working Paper: Sticky wages and the Great Depression: evidence from the United Kingdom (2021)
Working Paper: Sticky wages and the Great Depression: Evidence from the United Kingdom (2021)
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