Do Financial Market Imperfections Affect the Cyclicality of Employment?
AbstractIn this paper I show that the idea that firms faced with a liquidity constraint display "excess sensitivity" of employment to shocks is not correct. The employment decision is independent of the financing constraint and artificial data shows that there is no such excess sensitivity.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 02-10.
Length: 15 pages
Date of creation: Oct 2002
Date of revision:
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employment volatility; investment; Q theory;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
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