Recently, also real rigidities in labor markets and financial markets are receiving more attention, think, e.g., of the important role of labor market frictions and credit market imperfections.
In the context of disequilibrium, in particular real rigidities in goods and labor market are an interesting aspect as these make that the adjustment toward the long-run Walrasian equilibrium depends on the different disequilibrium regimes after the economy is hit by various types of shocks.
Real rigidities occur whenever a firm is slow to adjust its real prices in response to a changing economic environment.
The expense created by real rigidities combined with the menu cost of changing prices makes it less likely that firm will cut prices to a market clearing level.
Ball and Romer argued that real rigidities in the labor market keep a firm's costs high, which makes firms hesitant to cut prices and lose revenue.
For example, a firm can face real rigidities if it has market power or if its costs for inputs and wages are locked-in by a contract.
However, based on the results of the International Wage Flexibility Project and the Bank of Spain [(see Cuadrado et al. (2011)], none of these European countries exhibits a high degree of real wage rigidity.
Real wage rigidity is well-documented to be high in Spain.25 Reentry wages after unemployment have, however, fallen considerably during the crisis and this process started as early as 2010.
Cuadrado et al. (2011), using the same data set on wages as in this study but a different methodology, find evidence of a high level of real wage rigidity in Spain.
Spain ranks fifth in such ranking after countries with extensive wage indexation (Belgium, Sweden, Finland and France), while countries such as Germany and Italy have low levels of real wage rigidity.23 Therefore, the fact that estimated levels of real wage cyclicality in Europe are higher than initially expected may be driven by the selected pool of countries for which estimations are available.
Inspection of trabecular bone microarchitecture changes according to the MIA dose, correlation between changes in cartilage and those in the endochondrial microarchitecture, the elimination of experimental errors, detailed trace studies, and analysis of real mechanical rigidity changes in trabecular bone microarchitecture will improve the reliability of our conclusions.
