Authors: Juessen, Falko
Linnemann, Ludger
Title: Government spending and unemployment in the OECD
Other Titles: Evidence from an annual panel VAR
Language (ISO): en
Abstract: We use a panel VAR to assess the dynamic effects of government spending on unemployment rates in OECD countries. We first present Monte Carlo evidence that the Hahn and Kuersteiner (2002) estimator produces almost unbiased estimates of impulse responses in an annual macro panel VAR. In the application, we find that positive shocks to government spending identified either through a Cholesky decomposition or by sign restrictions tend to lower the unemployment rate in the short run, though signifi cance depends on identification assumptions.
Subject Headings: fiscal policy effects
panel vector autoregressions
sign restrictions
simulation
unemployment
URI: http://hdl.handle.net/2003/29379
http://dx.doi.org/10.17877/DE290R-3291
Issue Date: 2012-03-07
Appears in Collections:Sonderforschungsbereich (SFB) 823

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