We develop a N-sector business cycle network model a la Long and Plosser (1983), featuring heterogenous money demand a la Bewley (1980) and Lucas (1980). Despite incomplete markets and a well-defined distribution of real money balances across heterogeneous households, the enriched N-sector...

The Great Recession has witnessed not only a marked disruption in the credit markets and a sharp increase of capital unemployment but also a severe deterioration of the matching efficiency in the labor market, as evidenced by the historically high unemployment rate and a significant outward...