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Article: Nominal and real wage cyclicality during the interwar period.
- Article from:
- Southern Economic Journal
- Article date:
- January 1, 1995
- Author:
CopyrightCOPYRIGHT 1995 Southern Economic Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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I. Introduction
Although there have been numerous attempts to study the cyclicality of real wages in the U.S., no consensus has formed as to the implications of the various findings for business cycle theory. This paper will demonstrate that separating the real wage into its nominal and price level components can shed new light on the interwar U.S. labor market. More specifically, we will show that an evolution from a relatively laissez-faire labor market during the 1920s, to a more highly regulated labor market during the 1930s, may have resulted in a more countercyclical real wage rate.
If we could be certain that equilibrium business cycle models provided ...