's constrained credit status changes with the improvement of its efficiency. The results further reveal that financially constrained …

propose a simple model where firms producing varieties face labor-market frictions and credit constraints. In the model …, tighter credit leads to lower output, lower number of vacancies, and higher directed-search unemployment. Where workers are … more productive at higher levels of firm output, lower credit supply increases firm capital intensity, raises inequality by …

them to raise their prices, increase their utilization of credit, and reduce their employment. However, when policy rates …