@techreport{NBERw14729,
 title = "What Caused the Recession of 2008?  Hints from Labor Productivity",
 author = "Casey Mulligan",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "14729",
 year = "2009",
 month = "February",
 URL = "http://www.nber.org/papers/w14729",
 abstract = {A labor market tautology says that any change in labor usage can be decomposed into a movement along a marginal productivity schedule and a shift of the schedule.  I calculate this decomposition for the recession of 2008, assuming an aggregate Cobb-Douglas marginal productivity schedule, and find that all of the decline in employment and hours since December 2007 is a movement along the schedule.  This finding suggests that a reduction in labor supply and/or an increase in labor market distortions are major factors in the 2008 recession.  The decline in aggregate consumption suggests that the reduction in labor supply (if any) is neither a wealth nor an intertemporal substitution effect.  "Sticky real wages" or the emergence of significant work disincentives are possible explanations for these findings.},
}