Financial shocks and labor market fluctuations
This paper investigates the effect of financial shocks using an estimated gen-eral equilibrium model that links the firm's ‡flows of financing with labor marketvariables. The results show that fi nancial shocks have sizeable effects on financialvariables, vacancy posting, unemploymen...
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| Format: | Working paper |
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University of Oxford
2015
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| Summary: | This paper investigates the effect of financial shocks using an estimated gen-eral equilibrium model that links the firm's ‡flows of financing with labor marketvariables. The results show that fi nancial shocks have sizeable effects on financialvariables, vacancy posting, unemployment and wages. Shocks to the job destruc-tion rate are important in describing ‡fluctuations in unemployment. The analysisalso investigates the underlying driving forces of some key comovements in thedata. |
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