Gross and Net Loan Flows under Search and Matching Frictions in Labour and Credit Markets
University of Rome I - Department of Public Economics
University of Rome I
University of Rome III - Department of Economics
August 7, 2009
The interplay of imperfections in several markets is the new frontier of New Keynesian DSGE model research. Following a suggestion put forward by Wasmer and Weil (2004) in a partial equilibrium environment, we introduce search and matching frictions in both the labour and the financial markets into a cash in advance New Keynesian DSGE theoretical model. We compare the offspring of our model with some of the empirical findings documented by the recent literature on gross credit flows dynamics over the business cycle. We show that our results are in line with several of such findings.
Keywords: Credit and search frictions, business cycle
JEL Classification: E24, E24, E44working papers series
Date posted: August 10, 2009
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo7 in 0.359 seconds