It is well known that researchers in several traditions have argued that innovation is essential to ensure countries’ economic growth (Schumpeter, 1912; Freeman, 1987; Pavitt, 1982; Romer, 1990; Jones, 1995). At the same time, others researchers have stressed the role of imitative capacity in economic...

Interest-rate spreads and the unemployment rate vary negatively with stock prices. Liquidity plays a role in a Mortensen-Pissarides economy with a twist: households self-insure against preference shocks by accumulating equity claims. Higher stock market valuations relax liquidity constraints,...