Sticky wages can lead to unemployment from "summary" of The General Theory of Employment, Interest, and Money by John Maynard Keynes
One of the key concepts discussed in The General Theory of Employment, Interest, and Money is the idea of sticky wages and its potential to result in unemployment. When wages are considered sticky, it means that they do not adjust quickly or easily in response to changes in market conditions. This phenomenon can have significant implications for the labor market and overall level of employment in an economy. In a situation where wages are sticky, employers may find themselves in a position where they are unable to adjust wages downward to reflect changing economic conditions. This can lead to a mismatch between the wages being paid and the level of productivity or demand for labor. As a result, employers may be forced to lay off workers in order to reduce costs, leading to ...
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