Real wages rise and fall with business cycle shocks, impacting workers.
The study looked at how real wages change during economic ups and downs. They used a special model to see if real wages react differently to different types of economic shocks. The results showed that when the economy is doing well because of supply-related issues, real wages tend to go up and down with the economy. But when the economy is doing well because of high demand, real wages tend to move in the opposite direction of the economy.