increases the incentive to create jobs. The transmission mechanism of 'credit shocks' is fundamentally different from the … typical credit channel and the model can explain why firms cut hiring after a credit contraction even if they have not …

This paper shows that currency arrangements impact on credit available through default incentives. To this end we build … a symmetric two-country model with money and imperfect credit market integration. With the Euro Area context in mind, we … capture differences in credit market integration by variations in the cost for banks to grant credit for cross …