Arbeitspapier
Unemployment and Vacancy Dynamics with Imperfect Financial Markets
This paper proposes a simple general equilibrium model with labour market frictions and an imperfect financial market. The aim of the paper is to analyse the transitional dynamics of unemployment and vacancies when financial constraints are in place. We model the financial sector as a monopolistically competitive banking sector that intermediates financial capital between firms. This structure implies a per period financial resource constraint which has a closed form solution and describes the transition path of unemployment and vacancies to their steady state values. We show that the transition path crucially depends on the degree of wage flexibility. When wages are bargained sequentially the transition path is always downward sloping. This implies unemployment and vacancies adjust in opposite directions as observed in the data. When calibrating the model to the Great Recession and its aftermath we find that the lack of an improvement in the financial sector's effectiveness to intermediate resources played a crucial role in the slow recovery of the labour market.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 9525
- Klassifikation
-
Wirtschaft
Labor Turnover; Vacancies; Layoffs
Unemployment: Models, Duration, Incidence, and Job Search
General Financial Markets: General (includes Measurement and Data)
- Thema
-
job search
unemployment
financial markets
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Carrillo-Tudela, Carlos
Graber, Michael
Wälde, Klaus
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for the Study of Labor (IZA)
- (wo)
-
Bonn
- (wann)
-
2015
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Carrillo-Tudela, Carlos
- Graber, Michael
- Wälde, Klaus
- Institute for the Study of Labor (IZA)
Entstanden
- 2015
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