This paper examines the importance of regional labor reallocation for unemployment and studies the link between inter-regional mobility and reallocation. I construct a multi-region economy with segmented labor markets, endogenously determined regional house prices, and limited worker mobility,...

We investigate the role of debt market policies in mitigating liquidity traps driven by household leverage. When borrowers engage in deleveraging, the interest rate needs to fall to induce lenders to pick up the decline in aggregate demand. However, if the fall in the interest rate is limited by...