Title of article
Unemploymentfiscalmultipliers
Author/Authors
Tommaso Monacelli، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2010
Pages
23
From page
531
To page
553
Abstract
We estimatetheeffectsoffiscalpolicyonthelabormarketinUSdata.Anincreasein
governmentspendingof1percentofGDPgeneratesoutputandunemployment
multipliers,respectively,ofabout1.2percent(atoneyear)and0.6percentagepoints(at
the peak).EachpercentagepointincreaseinGDPproducesanincreaseinemploymentof
about 1.3millionjobs.Totalhours,employmentandthejobfindingprobabilityallrise,
whereastheseparationratefalls.Astandardneoclassicalmodelaugmentedwithsearch
and matchingfrictionsinthelabormarketlargelyfailsinreproducingthesizeofthe
outputmultiplierwhereasitcanproducearealisticunemploymentmultiplierbutonly
under aspecialparameterization.Extendingthemodeltostrengthenthecomplemen-
tarityinpreferences,toincludeunemploymentbenefits,realwagerigidityand/ordebt
financingwithdistortionarytaxationonlyworsensthepicture.NewKeynesianfeatures
only marginallymagnifythesizeofthemultipliers.Whencomplementarityiscoupled
with pricestickiness,however,themagnificationeffectcanbelarge
Keywords
UnemploymentLabor marketFiscal policy
Journal title
Journal of Monetary Economics
Serial Year
2010
Journal title
Journal of Monetary Economics
Record number
846410
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