Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70276
Authors: 
Amaral, Pedro S.
MacGee, James C.
Year of Publication: 
2012
Series/Report no.: 
EPRI Working Paper 2012-5
Abstract: 
We quantify the role of contractionary monetary shocks and wage rigidities in the U.S. Great Contraction. While the average economy-wide real wage varied little over 1929-33, real wages rose significantly in some industries. We calibrate a two-sector model with intermediates to the 1929 U.S. economy where wages in one sector adjust slowly. We find that nominal wage rigidities can account for less than a fifth of the fall in GDP over 1929-33. Intermediate linkages play a key role, as the output decline in our benchmark is roughly half as large as in our two-sector model without intermediates.
Subjects: 
Great Depression
Sectoral Models
Sticky Wages
JEL: 
E20
E30
E50
Document Type: 
Working Paper

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