Unemployment and finance: how do financial and labour market factors interact?

Abstract

Using annual data for 18 OECD countries over the period 1980-2004, we investigate how labour and financial factors interact to determine unemployment by estimating a dynamic panel model using the system generalized method of moments (GMM). We show that the impact of financial variables depends strongly on the labour market context.http://deepblue.lib.umich.edu/bitstream/2027.42/133013/1/wp973.pd