Setty, Ofer; Weiss, David; Eckstein, Zvi - Society for Economic Dynamics - SED - 2014
There is a strong correlation between the corporate interest rate spread and the unemployment rate.We make two … affect unemployment in a DMP model with capital. Second, we quantify these mechanisms, disciplining our model with US data …. Financial conditions affect unemployment in four ways. First, high interest rates lower profits. Second, higher interest rates …