Long-Term Unemployment, Excess Demand and the Wage Equation in Britain, 1925-39

Nicholas Crafts

No 147, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The relationship between unemployment and the rate of change of money wages in interwar Britain is re-examined. It is argued that improved estimates of the wage equation can be obtained by taking account explicitly of factors which change the level of excess demand associated with the measured unemployment rate. In particular, the evidence suggests that long-term unemployment did not act as a restraint on the growth of money wages. New estimates of the wage equation imply that the NAIRU rose during the 1930s as the proportion of unemployment that was long term was higher than in the late 1920s.

Keywords: NAIRU; Unemployment; United Kingdom; Wage Adjustment; Wages (search for similar items in EconPapers)
Date: 1986-12
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=147 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:147

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=147

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().