Unemployment, growth and fiscal policy : new insights on the hysteresis hypothesis
Raurich, Xavier (Universitat de Girona)
Sala Lorda, Hèctor (Universitat Autònoma de Barcelona)
Sorolla, Valeri (Universitat Autònoma de Barcelona)
Universitat Autònoma de Barcelona. Departament d'Economia Aplicada

Date:	2006
Description:	42 p.
Abstract:	We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and balanced budget rules cause a complementarity between capital and employment capable of explaining the existence of multiple equilibrium paths. Hysteresis is viewed as the result of a selection between these diferent equilibrium paths. We use this model to argue that, in contrast to the US, those fiscal policies followed by most of the European countries after the shocks of the 1970's may have played a central role in generating hysteresis.
Rights:	Aquest document està subjecte a una llicència d'ús de Creative Commons, amb la qual es permet copiar, distribuir i comunicar públicament l'obra sempre que se'n citin l'autor original, la universitat i el departament i no se'n faci cap ús comercial ni obra derivada, tal com queda estipulat en la llicència d'ús
Language:	Anglès
Series:	Departament d'Economia Aplicada. Documents de treball
Series:	Document de treball (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada) ; 0404
Document:	Working paper
Subject:	Desenvolupament econòmic ; Política fiscal ; Atur

DOI: 10.1017/S136510050605022X

42 p, 636.1 KB

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Research literature > Working papers > Department of Applied Economics. Working papers