Chugh, Sanjay K. - In: Journal of Economic Dynamics and Control 37 (2013) 12, pp. 2882-2912
We study the role of agency frictions and costly external finance in cyclical labor market dynamics, with a focus on how credit-market frictions may amplify aggregate TFP shocks. The main result is that aggregate TFP shocks lead to large fluctuations of labor market quantities if the model is...