Credit cycles as predictors of labor market slack: Evidence from the U․S․
This paper empirically studies the relationship between credit and unemployment fluctuations in the U.S. economy for the period 1955–2023. Drawing on the business cycle literature that focuses on changes in output, we model unemployment dynamics using a Markov-switching framework extended with credi...
| Autores: | , , |
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2025 |
| País: | España |
| Institución: | Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya) |
| Repositorio: | Recercat. Dipósit de la Recerca de Catalunya |
| OAI Identifier: | oai:recercat.cat:20.500.14342/5700 |
| Acceso en línea: | http://hdl.handle.net/20.500.14342/5700 https://doi.org/10.1016/j.eap.2025.08.006 |
| Access Level: | acceso abierto |
| Palabra clave: | Credit cycle Unemployment Forecast Markov-switching Crèdit Atur Previsió 33 |
| Sumario: | This paper empirically studies the relationship between credit and unemployment fluctuations in the U.S. economy for the period 1955–2023. Drawing on the business cycle literature that focuses on changes in output, we model unemployment dynamics using a Markov-switching framework extended with credit variables to assess the ability of credit to identify periods of labor market slack – instances where the unemployment rate exceeds its natural rate, exerting downward pressure on inflation. Our results show that contractions in real private credit carry valuable information for signaling labor market slack. Moreover, we find that cyclical variations in private credit have significant out-of-sample predictive power for labor market dynamics. |
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