Credit Markets and Unemployment in the Short Run and in the Long Run

Etienne Wasmer , Philippe Weil (1)

1 OFCE - Observatoire français des conjonctures économiques (Sciences Po)

This paper examines the short run and long run responses of unemployment to credit and labor market shocks in a world in which both credit and labor market frictions keep the economy away from full employment. We examine the respective contributions to equilibrium unemployement of stochastic credit market frictions and of credit conditions. We examine the contrasting effects of financial liberalization in the short run and in the long run.

Domaines: Economies et finances

Etienne Wasmer, Philippe Weil. Credit Markets and Unemployment in the Short Run and in the Long Run. International Economic Journal, 2001, 15 (1), pp.1 - 19. ⟨10.1080/10168730100000001⟩. ⟨hal-03393513⟩