Skip to Main content Skip to Navigation
New interface
Journal articles

Macroeconomic Dynamics in a Model of Goods, Labor and Credit Market Frictions

Abstract : Goods market frictions drastically change the dynamics of the labor market, both in terms of persistence and volatility. In a model with three imperfect markets – goods, labor, and credit – we find that credit and goods market imperfections are substitutable in raising volatility. Goods market frictions are unique in generating persistence. Two key mechanisms in the goods market generate large hump-shaped responses to productivity shocks: countercyclical goods market tightness and prices alter future profit flows and raise persistence; procyclical search effort of consumers and firms raises amplification. Goods market frictions are thus key in understanding labor market dynamics.
Document type :
Journal articles
Complete list of metadata
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Thursday, October 21, 2021 - 9:20:48 PM
Last modification on : Monday, March 21, 2022 - 2:50:37 PM
Long-term archiving on: : Saturday, January 22, 2022 - 8:59:53 PM


Files produced by the author(s)




Nicolas Petrosky-Nadeau, Etienne Wasmer. Macroeconomic Dynamics in a Model of Goods, Labor and Credit Market Frictions. Journal of Monetary Economics, 2015, 72, pp.97 - 113. ⟨10.1016/j.jmoneco.2015.01.006⟩. ⟨hal-03392977⟩



Record views


Files downloads