In this experimentation we simulate a flexibility shock on the labour market by changing the households resistance to cuts in money wages (the unemployed households lower their reservation wage after 3 months instead of 8 months previously).
The shock occures in the year 2030.

In the baseline scenario, the Beveridge Curve shows that the labour market is very rigid. In this experimentation, the change in the households behaviour leads to a change in the shape of the Beverdige curve. At the beginning, this shock leads to a drop in wages, but this drop affects demand, and firms reduce production. The process of deflation then reinforces itself: increasing unemployment accelerates wage cuts, demand and production decline. The income distribution is deeply affected. This deflationist spiral leads the system to a social crisis, with the collapse of real wages, and to a systemic crisis, with failure in the banking sector.

The interested reader will find more details in this paper:
Seppecher, P. (2012): "Flexibility of wages and macroeconomic instability in an agent-based computational model with endogenous money". Macroeconomic Dynamics, 16(s2).

See also: Simulating the introduction of a minimum wage in a deflationist context