Rue de la Banque no. 14: Land prices, lending to companies and job creations

The fluctuations of the value of land held by French firms present a very similar pattern to the ones of both investment and employment. This Rue de la Banque presents a model explaining those joint dynamics by a collateral channel; access to credit for firms is enhanced by an increase in the value of collateralised assets. This model, supported by empirical evidence, helps to explain labor market dynamics in France.