Budgetary Policy and Unemployment Dynamics in An OLG Model With Collective Bargaining  

Oleh:

Kaas, Leo ; Thadden, Leopold ; Thadden, Leopold von

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 114 no. 498 (Oct. 2004), page 867-889.
Topik: BUDGETARY PLANNING; budgetary policy; dynamics; OLG model; collective bargaining
Fulltext: 867.pdf (212.34KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.15 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We consider a dynamic general equilibrium model with capital accumulation and collective wage bargaining and investigate how unemployment responds to structural shocks under two stylised budgetary policies. Under balanced budgets, tax adjustments lead to higher unemployment on impact but enable a quick recovery of employment. By contrast, unbalanced budgets mitigate unemployment effects on impact but dynamics are more persistent due to weaker capital accumulation and future fiscal consolidations. These results are consistent with empirical evidence on a positive cross - country relationship between government borrowing and unemployment persistence.

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