We incorporate imperfectly insured unemployment in the finance constrained economy proposed by Woodford (1986), by … introducing unions and unemployment benefits financed by labor taxation. We show that this simple extension of the Woodford model …

determine unemployment. We show that the impact of financial variables depends strongly on the labour market context. Increased … market capitalization as well as decreased banking concentration reduce unemployment if the level of labour market regulation … intermediated credit worsens unemployment when the labour market is weakly regulated and coordinated, whereas it reduces …

We explore whether finance influences the impact of labour market institutions on unemployment. Using a data set of 18 … market variables (labour market regulation, union density, coordination in wage bargaining) to unemployment are a ffected by …