Welfare Cost of Fluctuations When Labor Market Search Interacts with Financial Frictions
研究了在包含搜寻匹配和金融摩擦的模型中，商业周期的福利成本，发现劳动力市场与金融摩擦的相互作用通过信贷乘数和内生工资刚性放大了冲击影响，导致显著的福利损失。
Abstract We study the welfare costs of business cycles in a search and matching model with financial frictions. The model replicates the volatility on labor and financial markets. Business cycle costs are sizable. Indeed, the interactions between labor market and financial frictions magnify the impact of shocks via (i) a credit multiplier effect and (ii) an endogenous wage rigidity inherent to financial frictions. In addition, in a nonlinear framework, large welfare costs of fluctuations are explained by the high average unemployment and the low job finding rates with respect to their deterministic steady‐state values.