Abstract We show that limited wage flexibility in economic downturns generates strong and state-dependent amplification of uncertainty shocks. It also explains the cyclical behaviour empirical measures uncertainty. In presence matching frictions, an occasionally binding constraint on downward adjustment enhances concavity firms’ hiring rule, resulting endogenous profit risk-premium. turn, highe...

This study aims to understand the dynamics of credit and business cycle interactions at aggregated disaggregated (sectors industries) levels in Indian context. We explore both parametric non-parametric time-series approach date major turning points calculate lead-lag measures. also test for synchronizing cycles finding that there is a procyclicality during crisis period. However, analysis secto...