Real Wages and Unemployment in Britain during the 1930s

Dimsdale, Nicholas; Nickell, Stephen; Horsewood, Nicholas

doi:10.2307/2234027

Cited by 78 publications

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“…We assume that these elasticities are applicable to all the electoral districts. The estimates of real wage elasticities range from -0.15 (Dimsdale and Horsewood 1989) to -1.36 (Corbett 1991). 20 For the following calculations a real wage elasticity of -1.0 -at the upper range (in absolute value) of plausible values -is assumed, for the sake of simplicity.…”

Section: Estimation Methodsmentioning

confidence: 99%

Averting the Nazi seizure of power: A counterfactual thought experiment

Stögbauer¹,

Komlos²

2004

European Review of Economic History

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The Great Depression in Germany led to the radicalization of the electorate, leading the country and then the world into the darkest days of Western Civilization. Could it have been otherwise? This paper explores whether the NSDAP takeover might have been averted with a fiscal policy that lowered the unemployment rate in those parts of Germany where their support rose most rapidly. A counterfactual simulation model based on estimates of the relationship between unemployment and the radical vote at the electoral district level provides a framework for considering how much lower unemployment would have to have been in those districts to prevent the NSDAP from becoming a formidable political force in Germany. Budget neutrality is maintained, so that the simulations do not depend on an expanded fiscal policy. The results indicate that such a policy could well have averted the NSDAP's seizure of power, and the catastrophe that followed in its wake. "The only thing we owe history is to rewrite it." -Oscar WildeThat the Great Depression in Germany led to the radicalization of the electorate is not controversial. With the unprecedented increase in unemployment, the support for the extreme right-wing NSDAP (Nationalsozialistische Deutsche Arbeiterpartei) increased dramatically, leading Germany and then the world directly into the darkest days of Western Civilization (Stögbauer 2001b). Could it have been otherwise? We explore whether the NSDAP takeover could have been averted with a fiscal policy that lowered the unemployment rate in those parts of Germany where their support increased most rapidly. A counterfactual simulation model based on estimates of the relationship between unemployment and the radical vote at the electoral district level provides a framework for considering how much lower unemployment would have to have been in these districts to prevent the NSDAP from becoming a formidable political force in Germany.2 Budget neutrality is strictly maintained, so that the simulations do not depend on an expanded fiscal policy. Instead, expenditures, and thereby also unemployment, are reshuffled among electoral districts in a way that increases government expenditures in regions where the propensity to vote for the NSDAP was highest and reduces them in those areas where they were lowest. Thus, the model redistributes unemployment spatially, without further burdening the already over-stretched Weimar budget.The results indicate that such a policy could well have averted the NSDAP takeover, and the catastrophe that followed inextricably in its wake, without an increase in government expenditures. Financial considerations alone did not impose a binding constraint on decisive government action in defense of the Republic. However, this counterfactual analysis does notimply --and this should be made clear at the very outset --that the government was actually capable of mustering the will to bring such an economic program into effect. In that sense, the policy considered below may well not have been feasible. The ...

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Section: Estimation Methodsmentioning

confidence: 99%

Averting the Nazi seizure of power: A counterfactual thought experiment

Stögbauer¹,

Komlos²

2004

European Review of Economic History

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“…In this newer tradition (Oswald, 1982;Nickell and Andrews, 1983;Layard and Nickell, 1986;Dimsdale et al,1989) the wage equation is derived from microeconomic theory of wage bargaining.…”

Section: The Wage Curvementioning

confidence: 99%

From Phillips curve to wage curve

Graafland

1992

De Economist

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Abstract:In most traditional macro-economic models of the Netherlands the wage equation is specified by a Phillips curve, in which wage growth is negatively related to the unemployment rate. This paper shows, however, that wage formation can better be described by the so-called wage curve, in which the wage level instead of wage growth depends negatively on the unemployment rate.14 Van Stolkweg, 2585 JR, The HagueThe Netherlands Telephone (070) 3514151Telefax (070) 3505847

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“…Brunner (1981) and Eichengreen and Hatton (1988) for contributions to research on the Great Depression and interwar labor markets. Dimsdale et al (1989) present a study of the interwar labor market in the UK and Hatton and Thomas (2010) offer a comparative perspective on US and UK interwar labor markets. 2 Discussions and analyses of Swedish economic policies during the interwar period are contained in e.g.…”

Section: Introductionmentioning

confidence: 99%

Wage and employment determination in volatile times: Sweden 1913–1939

Holmlund

2012

Cliometrica

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at an annual rate of 30 percent followed by a period of sharp deflation where nominal wages and prices fell by 30 percent and unemployment increased from 5 to 30 percent. We examine whether relatively standard wage and employment equations can account for the volatile economic development during the interwar years. By and large, the answer is a qualified yes. Industry wages were responsive to industry-specific firm performance, suggesting a significant role for "insider forces" in wage determination. Unemployment had a strong downward impact on wages. There is evidence that reductions in working time added to wage pressure; yet estimates of labor demand equations suggest that cuts in working time may have slightly increased employment as firms substituted workers for hours. Terms of use: Documents inJEL-Code: J230, J310, N140, N340.

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Real Wages and Unemployment in Britain during the 1930s

Cited by 78 publications

References 0 publications

Averting the Nazi seizure of power: A counterfactual thought experiment

Averting the Nazi seizure of power: A counterfactual thought experiment

From Phillips curve to wage curve

Wage and employment determination in volatile times: Sweden 1913–1939

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