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Endogenous Participation in Imperfect Labour and Capital Markets

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  • Spiros Bougheas
  • Richard Upward

Abstract

We introduce endogenous participation in an economy with labor and financial market frictions. Agents can choose to be workers or entrepreneurs or not to participate in any market. We examine how the transition rates between these three options are affected by productivity shocks (business cycle conditions) and by changes in the level of market frictions (cross-country institutional quality variations).

Suggested Citation

  • Spiros Bougheas & Richard Upward, 2012. "Endogenous Participation in Imperfect Labour and Capital Markets," Discussion Papers 12/13, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:12/13
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    References listed on IDEAS

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    More about this item

    Keywords

    endogenous participation; labor market frictions; financial market frictions;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • G3 - Financial Economics - - Corporate Finance and Governance

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