Exact(8)
A Keynesian-style demand collapse is not the only aggregate event that could happen or did happen.
I contend that the crisis itself did much more to generate moral hazard than an effort to prevent a demand collapse would have done, in two ways.
(Honestly, I doubt that oil could get to $200 before provoking the kind of demand collapse that would also limit additional oil price increases).
At a minimum, the aggregate demand collapse should have frozen wage rates in dollar terms, so that inflation-adjusted wages would erode with inflation as consumer prices crept up.
The recent crisis was much less severe than the Depression because central banks thought deflation prevention was critical; in fighting deflation they couldn't help but prevent a big demand collapse.
It is incorrect to ignore fringe benefits (I discuss this and other wage measurement issues in Chapter 2 of "The Redistribution Recession"), but the choice of series is just a quibble, because none of the aggregate wage measures display a cumulative decline that would be commensurate with the huge, prolonged demand collapse said to have occurred.
Similar(52)
When the bubble burst, demand collapsed.
Or that when consumer demand collapses, it is good for public demand to do likewise?
As demand collapsed the take-or-pay clauses became more onerous.
As demand collapsed, businesses slashed payrolls and reduced wages, and a ruinous period of deflation began.
Demand collapsed as the credit machine ground to a halt and getting the economy going again has proved mightily difficult.
Write better and faster with AI suggestions while staying true to your unique style.
Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com