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Price and wage stickiness during the Great Depression

Published online by Cambridge University Press:  11 January 2005

JAKOB B. MADSEN
Affiliation:
Institute of Economics, University of Copenhagen, Denmark
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Abstract

This article examines the relative importance of sticky wages and sticky prices in explaining the length and the depth of the Great Depression. Econometric evidence shows that the supply failure was an outcome of widespread price stickiness and that wage stickiness only played a minor role as a propagating factor during the first years of the Depression. Microeconomic evidence suggests that there was widespread and increasing industrial concentration during the interwar period.

Type
Research Article
Copyright
© Cambridge University Press 2004

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