Gross and Net Loan Flows under Search and Matching Frictions in Labour and Credit Markets

Posted: 10 Aug 2009

See all articles by Giuseppe Ciccarone

Giuseppe Ciccarone

University of Rome I - Department of Public Economics

Danilo Liberati

Bank of Italy

Francesco Giuli

University of Rome III - Department of Economics

Date Written: August 7, 2009

Abstract

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, E44

Suggested Citation

Ciccarone, Giuseppe and Liberati, Danilo and Giuli, Francesco, Gross and Net Loan Flows under Search and Matching Frictions in Labour and Credit Markets (August 7, 2009). Available at SSRN: https://ssrn.com/abstract=1445430

Giuseppe Ciccarone

University of Rome I - Department of Public Economics ( email )

Via del Castro Laurenziano 9
Rome, 00161
Italy

HOME PAGE: http://dep.eco.uniroma1.it/~ciccaron/

Danilo Liberati

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Francesco Giuli (Contact Author)

University of Rome III - Department of Economics ( email )

via Ostiense, 139
Rome, 00154
Italy

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