Real wages respond differently to shocks, challenging traditional business cycle theories.
The study explores why real wages go up and down with the economy. Traditional theories say wages should go down when the economy is bad, but this study found that real wages actually go up when technology improves or oil prices rise. On the other hand, wages go down when there is too much labor or not enough demand for goods. This challenges previous ideas that wages should always move in the same direction as the economy.