TY - BOOK ID - 84783241 TI - Employment and the Great Recession : The Role of Real Wages PY - 2015 SN - 1513527347 151351928X PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Labor KW - Production and Operations Management KW - Business Fluctuations KW - Cycles KW - Labor Demand KW - Wages, Compensation, and Labor Costs: General KW - Macroeconomics: Production KW - Employment KW - Unemployment KW - Wages KW - Intergenerational Income Distribution KW - Aggregate Human Capital KW - Aggregate Labor Productivity KW - Mobility, Unemployment, and Vacancies: General KW - Unemployment: Models, Duration, Incidence, and Job Search KW - Labour KW - income economics KW - Macroeconomics KW - Output gap KW - Real wages KW - Employment rate KW - Production KW - Economic theory KW - Spain UR - https://www.unicat.be/uniCat?func=search&query=sysid:84783241 AB - This paper argues that the sharp increase in unemployment in a number of advanced countries during the Great Recession was not just cyclical (the result of a lack of aggregate demand); the degree of adjustment of real wages and the impact this had on labor productivity also played a role. In many countries, post-2007 employment losses were modest, as real wages adjusted when the economy slowed down. But in some countries real wage growth stayed too high for too long. The result was large-scale labor shedding, which boosted labor productivity but also contributed to a sharp rise in unemployment. In this context, the paper discusses the different experiences of the UK (where employment increased) and Spain (where it fell sharply), and finds that almost two thirds of the employment losses in Spain resulted from the failure of real wages to adjust adequately. ER -