We study the role of agency frictions and costly external finance in cyclical labor market dynamics, with a focus on how credit-market frictions may amplify aggregate TFP shocks. The main result is that aggregate TFP shocks lead to large fluctuations of labor market quantities if the model is calibrated to the empirically observed countercyclicality of the finance premium. A financial accelerat...

Credit Market Constraints and Labor Market Decisions In this paper, we examine whether imperfections in credit markets spill over to other markets, particularly the labor market. We take the case of Italy, a country that experienced changes in the mortgage market brought about by the 1992 European unification and other institutional shifts. These events make Italy a good laboratory to study the...

Macroeconomic Volatilities and the Labor Market: First Results from the Euro Experiment This paper analyzes the effects of different labor market institutions on inflation and output volatility. The eurozone offers an unprecedented experiment for this exercise: since 1999, no national monetary policies have been implemented that could account for volatility differences across member states, but...

The study of labor flows across labor markets is a central ingredient in any discussion of labor market equilibrium. These labor flows help markets reach a more efficient allocation of resources. This paper surveys the economic analysis of immigration. It investigates the determinants of the immigration decision by workers in source countries and the impact of that decision on the host country'...

A Theoretical Model of the Chinese Labor Market This paper constructs a theoretical labor market model for China, and utilizes the model to examine the effects of various labor market policies on economic well-being. Two key features of the model are a segmented labor market involving three sectors – state-owned enterprises, private enterprises, and agriculture – and China’s unique household re...

Considerable research attention has focused on the labor market impacts of immigration, the operation and competitiveness of the European Union (EU) labor market, and the expenditures and advantages of labor circulation for sending and receiving economies. The aim of the present study is to examine and evaluate the negative social consequences arising from the mobility of workers, the social an...