FINANCIAL RISK AND UNEMPLOYMENT

• 成果类型: Article
• 署名作者: Eckstein, Zvi; Setty, Ofer; Weiss, David
• 署名单位: Reichman University; Tel Aviv University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12360
• 发表日期: 2019
• 页码: 475-516
• 关键词: equilibrium unemployment; cyclical behavior; credit; LABOR; VACANCIES; fluctuations; INVESTMENT; volatility; search; job

摘要

There is a strong correlation between corporate interest rates, their spreads relative to Treasuries, and the unemployment rate. We model how corporate interest rates affect equilibrium unemployment and vacancies, in a Diamond-Mortesen-Pissarides search and matching model. Our simple model permits the exploration of U.S. business cycle statistics through the lens of financial shocks. We calibrate the model using U.S. data without targeting business cycle statistics. Volatility in the corporate interest rate can explain a quantitatively meaningful portion of the labor market. Data on corporate firms support the hypothesis that firms facing more volatile financial conditions have more volatile employment.