The literature on unemployment has mostly focused on labor market issues while the impact of capital formation is … largely neglected. Job-creation is often thought to be a matter of encouraging more employment on a given capital stock. In … contrast, this paper explicitly deals with the long-run consequences of institutional shocks on capital formation and …

We implement capital in an endogenous separations New Keynesian matching model. In contrast to the vintage capital … theory, we suggest a more general approach, such that workers have unrestricted access to a proportional share of the capital … stock. We find that the introduction of capital generates an important channel for the transmission of aggregate …

rates caused by demographic forces. This insight is obtained in a model in which intangible capital cannot attract external … aggregate output. An increase in the share of intangible capital in production reduces the borrowing capacity and increases the …-intense economy, the ability of firms to purchase intangible capital using retained earnings is impaired by low interest rates …