Disentangling Goods, Labor, and Credit Market Frictions in Three European Economies - Archive ouverte HAL Access content directly
Journal Articles Labour Economics Year : 2016

Disentangling Goods, Labor, and Credit Market Frictions in Three European Economies

Abstract

We build a flexible model with search frictions in three markets: credit, labor, and goods markets. We then apply this model (called CLG) to three different economies: a flexible, finance-driven economy (the UK), an economy with wage moderation (Germany), and an economy with structural rigidities (Spain). In these three countries, goods and credit market frictions play a dominant role in entry costs and account for 75% to 85% of the total entry costs. In the goods market, adverse supply shocks are amplified through their propagation to the demand side, as they also imply income losses for consumers. This adds up to, at most, an additional 15% to 25% to the impact of the shocks. Finally, the speed of matching in the goods market and the credit market accounts for a small fraction of unemployment: most variation in unemployment comes from the speed of matching in the labor market.
Fichier principal
Vignette du fichier
2016-wasmer-disentangling-goods-labor-and-credit-market-frictions.pdf (2.36 Mo) Télécharger le fichier
Origin : Publisher files allowed on an open archive

Dates and versions

hal-03567961 , version 1 (12-02-2022)

Identifiers

Cite

Thomas Brzustowski, Nicolas Petrosky-Nadeau, Etienne Wasmer. Disentangling Goods, Labor, and Credit Market Frictions in Three European Economies. Labour Economics, 2016, Forthcoming, ⟨10.1016/j.labeco.2016.05.006⟩. ⟨hal-03567961⟩
9 View
11 Download

Altmetric

Share

Gmail Facebook Twitter LinkedIn More