Economists debate how important credit availability is to sustaining real economic growth. Episodes of financial instability and tight credit create a “credit crunch.” This paper investigates the effects of a credit crunch on employment in broad sectors of the U.S. economy. Monthly employment data is used to compare changes in employment by sector during recessions associated with a credit crunch and recessions not associated with a credit crunch. The results suggest that there is not a significant difference in how employment is affected in these broad sectors. The evidence supports the idea of a financial business cycle.
Major Themes in Economics
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"Effects of a Credit Crunch on Employment by Sector in the U.S.: How have Recessions Associated with Credit Crunches Differed from Other Recessions?,"
Major Themes in Economics, 11, 71-82.
Available at: https://scholarworks.uni.edu/mtie/vol11/iss1/7