Disentangling goods, labor, and credit market frictions in three European economies
Thomas Brzustowski,
Nicolas Petrosky-Nadeau and
Etienne Wasmer
No 2015-22, Working Paper Series from Federal Reserve Bank of San Francisco
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 the three countries, goods and credit market frictions play a dominant role in entry costs and account for 75% to 85% of 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 of the variation in unemployment comes from the speed of matching in the labor market.
Pages: 37 pages
Date: 2015-12-18
Note: This paper previously circulated under the title “A steady-state model of a non-Walrasian economy with three imperfect markets.”
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.frbsf.org/economic-research/files/wp2015-22.pdf Full text (application/pdf)
Related works:
Journal Article: Disentangling goods, labor, and credit market frictions in three European economies (2018) 
Working Paper: Disentangling goods, labor, and credit market frictions in three European economies (2018) 
Working Paper: Disentangling Goods, Labor, and Credit Market Frictions in Three European Economies (2016) 
Working Paper: Disentangling Goods, Labor, and Credit Market Frictions in Three European Economies (2016) 
Working Paper: Disentangling goods, labor and credit market frictions in three European economies (2015) 
Working Paper: Disentangling goods, labor and credit market frictions in three European economies (2015) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2015-22
Ordering information: This working paper can be ordered from
DOI: 10.24148/wp2015-22
Access Statistics for this paper
More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().