Real wage rigidity leads to involuntary unemployment, impacting public policy.
The article discusses why wages sometimes stay the same even when the economy changes, leading to people being unable to find jobs. It looks at how this affects public policies. The researchers explore different reasons for why wages might not change, like contracts between workers and employers, unions, and companies paying higher wages to boost productivity. They also study how these factors can impact the economy as a whole. The article concludes by discussing the important issues that arise from these findings.