Unemployment and real wages in Weimar Germany
This paper contributes to the debate on the causes of unemployment in interwar Germany. It applies the Layard-Nickell model of the labour market to interwar Germany, using a new quarterly data set. The basic model is extended to capture the effects of the tariff wage under the Weimar Republic and th...
| Main Authors: | , , |
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| Format: | Working paper |
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University of Oxford
2004
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| _version_ | 1826304154286424064 |
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| author | Dimsdale, N Horsewood, N van Riel, A |
| author_facet | Dimsdale, N Horsewood, N van Riel, A |
| author_sort | Dimsdale, N |
| collection | OXFORD |
| description | This paper contributes to the debate on the causes of unemployment in interwar Germany. It applies the Layard-Nickell model of the labour market to interwar Germany, using a new quarterly data set. The basic model is extended to capture the effects of the tariff wage under the Weimar Republic and the Nazis. The estimated equations suggest that demand shocks, combined with nominal inertia in the labour market, were important in explaining unemployment. In addition real wage pressures due to the political processes of wage determination were a major influence on unemployment. Negative demand shocks appear to have been initially domestic and to have started before the impact of the World Depression. Both negative developments on the demand side of the economy and pressures coming from the supply side raised unemployment in the slump. In the recovery the wage policies of the Nazis and the revival of demand both contributed to the fall in unemployment. The mutual reinforcement of these factors may help to explain the severity of the interwar cycle in Germany. It also serves to emphasize the close connection between political and economic processes in this important episode in macroeconomic history. |
| first_indexed | 2024-03-07T06:13:29Z |
| format | Working paper |
| id | oxford-uuid:f053de4c-589e-4d05-afc4-fb31f49e7ae3 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T06:13:29Z |
| publishDate | 2004 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:f053de4c-589e-4d05-afc4-fb31f49e7ae32022-03-27T11:46:57ZUnemployment and real wages in Weimar GermanyWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:f053de4c-589e-4d05-afc4-fb31f49e7ae3Bulk import via SwordSymplectic ElementsUniversity of Oxford2004Dimsdale, NHorsewood, Nvan Riel, AThis paper contributes to the debate on the causes of unemployment in interwar Germany. It applies the Layard-Nickell model of the labour market to interwar Germany, using a new quarterly data set. The basic model is extended to capture the effects of the tariff wage under the Weimar Republic and the Nazis. The estimated equations suggest that demand shocks, combined with nominal inertia in the labour market, were important in explaining unemployment. In addition real wage pressures due to the political processes of wage determination were a major influence on unemployment. Negative demand shocks appear to have been initially domestic and to have started before the impact of the World Depression. Both negative developments on the demand side of the economy and pressures coming from the supply side raised unemployment in the slump. In the recovery the wage policies of the Nazis and the revival of demand both contributed to the fall in unemployment. The mutual reinforcement of these factors may help to explain the severity of the interwar cycle in Germany. It also serves to emphasize the close connection between political and economic processes in this important episode in macroeconomic history. |
| spellingShingle | Dimsdale, N Horsewood, N van Riel, A Unemployment and real wages in Weimar Germany |
| title | Unemployment and real wages in Weimar Germany |
| title_full | Unemployment and real wages in Weimar Germany |
| title_fullStr | Unemployment and real wages in Weimar Germany |
| title_full_unstemmed | Unemployment and real wages in Weimar Germany |
| title_short | Unemployment and real wages in Weimar Germany |
| title_sort | unemployment and real wages in weimar germany |
| work_keys_str_mv | AT dimsdalen unemploymentandrealwagesinweimargermany AT horsewoodn unemploymentandrealwagesinweimargermany AT vanriela unemploymentandrealwagesinweimargermany |