Building a model with three imperfect markets - goods, labor and credit - representing a product's life-cycle, we find … that goods market frictions drastically change the qualitative and quantitative dynamics of labor market variables. The … search models of the labor market fail in one of the two dimensions. Two factors related to goods market frictions generate …

differences in labor mobility and reallocation costs, which are typically ignored in American "International Trade" textbooks … human capital investments: they are not independent of the aggregate state of labor markets, and in particular, frictions … and slackness of the labor market raises the returns to specific human capital investments relative to general capital …

follow this line of research to the labor literature concerned by the volatility of labor market outcomes to productivity … shocks initiated by Shimer (2005): in an economy with search on credit and labor markets, a financial multiplier raises the … elasticity of labor market tightness to productivity shocks. This multiplier increases with total financial costs and is …