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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/46558
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| Title: | | Do government purchases affect unemployment?  |
| Authors: | | Holden, Steinar Sparrman, Victoria |
| Issue Date: | | 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 |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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