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Real interest rate and labor market performance in developing countries

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  • Feldmann, Horst

Abstract

Using data on 68 developing countries from 1979 to 2008 and controlling for a wide array of factors, this paper finds that a rise in the real interest rate increases the unemployment rate and decreases the employment rate. The magnitude of these effects is small. The results are robust to variations in specification.

Suggested Citation

  • Feldmann, Horst, 2012. "Real interest rate and labor market performance in developing countries," Economics Letters, Elsevier, vol. 117(1), pages 200-203.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:200-203
    DOI: 10.1016/j.econlet.2012.04.091
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    References listed on IDEAS

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    1. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 15-90, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Horst Feldmann, 2012. "Product Market Regulation and Labor Market Performance around the World," LABOUR, CEIS, vol. 26(3), pages 369-391, September.
    2. Feldmann, Horst, 2015. "Banking system concentration and unemployment in developing countries," Journal of Economics and Business, Elsevier, vol. 77(C), pages 60-78.

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    More about this item

    Keywords

    Employment; Real interest rate; Unemployment;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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