I forgot to mention that - that came up in the Mulligan seminar too and he thought it was a big argument against demand-side stories.
Real wage cyclicality confusion has been explored for something like seventy five years now, and it is not proof that demand side stories are wrong because of how its driven by some aggregation biases. And, of course, any sort of non-budging wages may very well be a sticky wages story rather than a safety net/reservation wage story.
Anyway - I have some engineering workforce stuff to do right now, but I wanted to note this came up too before I forgot.
What About Trade Deficits, Anyway?: DeLong FAQ
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