Imperfect Information, Credit Markets and Unemployment

Greenwald, Bruce C. N.; Stiglitz, Joseph E.

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Imperfect Information, Credit Markets and Unemployment

NBER Working Paper No. w2093

14 Pages Posted: 26 Jan 2007 Last revised: 22 Sep 2022

See all articles by Bruce C. N. Greenwald

Bruce C. N. Greenwald

National Bureau of Economic Research (NBER); Columbia University - Columbia Business School, Finance

Joseph E. Stiglitz

Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER)

Date Written: December 1986

Abstract

This paper describes how imperfect information in both capital and labor markets can, in a context of maximizing firms and perfectly flexible prices and wages, give rise to cyclical variations in unemployment whose character closely resembles that of observed business cycles.

Suggested Citation: Suggested Citation

Greenwald, Bruce and Stiglitz, Joseph E., Imperfect Information, Credit Markets and Unemployment (December 1986). NBER Working Paper No. w2093, Available at SSRN: https://ssrn.com/abstract=344863