scholarly journals The Elephant in the Room: The Impact of Labor Obligations on Credit Markets

2020 ◽  
Vol 110 (6) ◽  
pp. 1673-1712 ◽  
Author(s):  
Jack Favilukis ◽  
Xiaoji Lin ◽  
Xiaofei Zhao
Keyword(s):  
Labor Market ◽  
Credit Markets ◽  
Credit Spreads ◽  
Market Frictions ◽  
Labor Share ◽  
International Firms ◽  
Labor Market Frictions ◽  
The Impact ◽  
Better Than

We show that labor market frictions are first-order for understanding credit markets. Wage growth and labor share forecast aggregate credit spreads and debt growth as well as or better than alternative predictors. They also predict credit risk and debt growth in a cross section of international firms. Finally, high labor share firms choose lower financial leverage. A model with labor market frictions and risky long-term debt can explain these findings, and produce large credit spreads despite realistically low default probabilities. This is because precommitted payments to labor make other committed payments (i.e., interest) riskier. (JEL D33, E23, E24, E25, E44, F23, G32)

scholarly journals Locking down the Impact of New Zealand’s COVID-19 Alert Level Changes on Pets

Animals ◽  
2021 ◽  
Vol 11 (3) ◽  
pp. 758
Author(s):  
Fiona Esam ◽  
Rachel Forrest ◽  
Natalie Waran
Keyword(s):  
New Zealand ◽  
Separation Anxiety ◽  
National Surveys ◽  
Normal Life ◽  
Pet Owners ◽  
Level 1 ◽  
The Impact ◽  
Better Than

The influence of the COVID-19 pandemic on human-pet interactions within New Zealand, particularly during lockdown, was investigated via two national surveys. In Survey 1, pet owners (n = 686) responded during the final week of the five-week Alert Level 4 lockdown (highest level of restrictions—April 2020), and survey 2 involved 498 respondents during July 2020 whilst at Alert Level 1 (lowest level of restrictions). During the lockdown, 54.7% of owners felt that their pets’ wellbeing was better than usual, while only 7.4% felt that it was worse. Most respondents (84.0%) could list at least one benefit of lockdown for their pets, and they noted pets were engaged with more play (61.7%) and exercise (49.7%) than pre-lockdown. Many respondents (40.3%) expressed that they were concerned about their pet’s wellbeing after lockdown, with pets missing company/attention and separation anxiety being major themes. In Survey 2, 27.9% of respondents reported that they continued to engage in increased rates of play with their pets after lockdown, however, the higher levels of pet exercise were not maintained. Just over one-third (35.9%) of owners took steps to prepare their pets to transition out of lockdown. The results indicate that pets may have enjoyed improved welfare during lockdown due to the possibility of increased human-pet interaction. The steps taken by owners to prepare animals for a return to normal life may enhance pet wellbeing long-term if maintained.

scholarly journals Trade and Frictional Unemployment in the Global Economy

2020 ◽  
Vol 18 (6) ◽  
pp. 2869-2921 ◽  
Author(s):  
Céline Carrère ◽  
Anja Grujovic ◽  
Frédéric Robert-Nicoud
Keyword(s):  
United States ◽  
Labor Market ◽  
Global Economy ◽  
The United States ◽  
Market Frictions ◽  
Unemployment Benefits ◽  
Trade Model ◽  
Labor Market Frictions ◽  
Trade Opening ◽  
Employment Data

Abstract We develop a multicountry, multisector trade model featuring risk-averse workers, labor market frictions, unemployment benefits, and equilibrium unemployment. Trade opening leads to a reduction in unemployment when it simultaneously raises welfare and reallocates labor toward sectors with lower-than-average labor market frictions. We then estimate and calibrate the model using employment data from 31 OECD countries and worldwide trade data. Finally, we quantify the potential unemployment, real wage, and welfare effects of repealing NAFTA and raising bilateral tariffs between the United States and Mexico to 20%. This policy would increase unemployment by 2.4% in the United States and 48% in Mexico.

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