Credit Constraints and the Persistence of Unemployment
Article dans une revue: In this paper, we argue that credit market imperfections impact not only the level of unemployment, but also its persistence. For this purpose, we first develop a theoretical model based on the equilibrium matching framework of Mortensen and Pissarides (1999) and Pissarides (2000) where we introduce credit constraints. We show these credit constraints not only increase steady-state unemployment, but also slow down the transitional dynamics. We then provide an empirical illustration based on a country panel dataset of 20 OECD countries. Our results suggest that credit market imperfections significantly increase the persistence of unemployment.
Auteur(s)
Nicolas Dromel, Elie Kolakez, Etienne Lehmann
Revue
- Labour Economics
Date de publication
- 2010
Mots-clés JEL
Mots-clés
- Credit markets
- Labour markets
- Unemployment
- Credit constraints
- Search frictions
Pages
- 823-834
URL de la notice HAL
Version
- 1
Volume
- 17