unemployment or faster growth. Weak output growth after such a cost shock is somewhat puzzling and has led some to question the … structurally slower real wage growth, that is, ""wage moderation,"" does raise output growth and lower unemployment rates. However …

lead to unemployment surges, as firms are forced to cut costs when financing becomes expensive or is no longer available …. As a result, all countries with risk premium shocks saw unemployment surge, even as euro area core countries managed to … contain unemployment as firms hoarded labor during the downturn. Most striking, wage bills in euro area crisis countries and …