FISCAL EXPANSIONS, UNEMPLOYMENT, AND LABOR FORCE PARTICIPATION: THEORY AND EVIDENCE*

• 成果类型: Article
• 署名作者: Brueckner, Markus; Pappa, Evi
• 署名单位: National University of Singapore; European University Institute; Autonomous University of Barcelona
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.1468-2354.2012.00717.x
• 发表日期: 2012
• 页码: 1205-1228
• 关键词: equilibrium unemployment; cyclical behavior; job destruction; POLICY; search; shocks; fluctuations; EMPLOYMENT; prices

摘要

Structural VARs indicate that for many OECD countries labor force participation, employment, and the unemployment rate significantly increase following increases in government expenditures under a variety of specifications and identification schemes. Fiscal expansions also tend to increase real wages. Existing models have difficulties in generating such responses. We show that the empirical regularities can be reproduced with two additions into a standard New Keynesian model with matching frictions: (a) a labor force participation choice and (b) workers heterogeneity.