Job Creation under Liquidity Constraints: the Spanish Case
This paper shows that liquidity constraints restrict job creation even when labor markets are flexible. In a dynamic model of labor demand, I show that in an environment of imperfect capital and imperfect labor markets, firms use temporary contracts to relax financial constraints. Evidence for the predictions of the model is presented using Spanish data from the CBBE.
|Date of creation:||2001|
|Date of revision:|
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