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Firms’ adjustment during times of crisis

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  • Ana Lamo

Abstract

Cutting costs is the prevailing adjustment strategy used by European firms during the early stages of the recent financial crisis, with labour costs being more commonly adjusted than non-labour costs. It is remarkable that not even in the worst crisis since the Great Depression firms cut base wages in an attempt to protect jobs. How they cut labour costs substantially depends on countries’ labour market institutions. JEL Classification: J30, J32, J33, J51

Suggested Citation

  • Ana Lamo, 2013. "Firms’ adjustment during times of crisis," Research Bulletin, European Central Bank, vol. 18, pages 9-11.
    • Handle: RePEc:ecb:ecbrbu:2013:0018:2
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    File URL: http://www.ecb.europa.eu/pub/pdf/other/researchbulletin18en.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    labour costs; margins; demand and credit shocks; employment;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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