Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5092095 | Journal of Comparative Economics | 2013 | 18 Pages |
Abstract
Using a sample of 97 countries spanning the period 1980-2008, we estimate that banking crises have, on average, a large negative impact on unemployment. This effect, however, largely depends on the flexibility of labor market institutions: while in countries with more flexible labor markets the impact of banking crises is sharper but short-lived, in countries with more rigid labor markets the effect is initially more subdued but highly persistent. These effects are even larger for youth unemployment in the short term, and long-term unemployment in the medium term. Conversely, large upfront, or gradual but significant, comprehensive market reforms have a positive impact on unemployment, albeit only in the medium term.
Related Topics
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Economics and Econometrics
Authors
Lorenzo E. Bernal-Verdugo, Davide Furceri, Dominique Guillaume,