Credit Market Imperfections And Persistent Unemployment
By Daron Acemoglu. 2001
203 citations recorded by the source corpus.
This paper develops the thesis that credit market frictions may be an important contributor to high unemployment in Europe. When a change in the technological regime necessitates the creation of new firms, this can happen relatively rapidly in the U.S. where credit markets function efficiently. In contrast, in Europe, job creation is constrained by credit market imperfections, so unemployment rises and remains high for an extended period. The data show that there has not been slower growth in the most credit dependent industries in Europe relative to the U.S., but the share of employment in these industries is lower than in the U.S.. This suggests that although credit market imperfections are unlikely to have been the major cause of the increase in European unemployment, they may have played some role in limiting European employment growth.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/463b2fbbd54461ffe617f62b56b447cf58b5e81d
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In Economics and Econometrics
Citations in the corpus
- Business Creation and the Stock Market (2004, unknown): “Over the last two decades the U.S. economy has outperformed the European economy in terms of both the adoption of new technologies (OECD, 1994) and employment growth (Acemoglu, 2001).”
- Credit, Vacancies and Unemployment Fluctuations (2014, background): “…to a decrease in equilibrium labor-market tightness which, through the Beveridge relationship U = δδ+f(θ) , implies a greater steady-state rate of unemployment.17 This insight is similar to that in Acemoglu (2001) and Wasmer and Weil (2004): Credit friction restricts firm entry on labor markets.”