Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46558
Authors: 
Holden, Steinar
Sparrman, Victoria
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Fiscal Policy, Macroeconomics and Growth 3482
Abstract: 
We investigate empirically the effect of government purchases on unemployment in 20 OECD countries, for the period 1960-2007. Compared to earlier studies we use a data set with more variation in unemployment, and which allows for controlling for a host of factors that influence the effect of government purchases. We find that increased government purchases lead to lower unemployment; an increase equal to one percent of GDP reduces un-employment by 0.2 percentage point in the same year. The effect is greater in downturns than in booms, and also greater under a fixed exchange rate regime than under a floating regime.
Subjects: 
fiscal policy
unemployment
JEL: 
E62
H30
Document Type: 
Working Paper

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