Gazeley, I. and Rice, P.
Wage and employment in Britain between the wars: quarterly evidence from the shipbuilding industry
Explorations in Economic History, 33, (3), . (doi:10.1006/exeh.1996.0017).
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The traditional view that the Great Depression of 1930–1932 arose from a collapse in aggregate demand has been challenged recently by economists who argue that the fundamental causes lay on the supply side of the market. This paper examines these issues in the context of the shipbuilding industry. A model of the determination of price, output, and employment is developed and estimated using quarterly data for the industry. The results support the view that a negative demand shock in the form of a sharp fall in the volume of world trade led to the sharp decline in output. In the case of shipbuilding, the impact on employment was exacerbated by nominal wage developments.
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