A search and matching model, when calibrated to the mean and volatility of unemployment in the postwar sample, can potentially explain the unemployment crisis in the Great Depression. The limited responses of wages from credible bargaining to labor market conditions, along with the congestion...

Asset returns move predictably over the credit cycle. Using credit expansion in the nonfinancial corporate sector to capture the phase of the credit cycle, this paper shows that both equity and corporate bond returns decline as credit expansion accelerates. Impulse response analysis suggests...