Location of Repository

New-keynesian or RBC transmission? The effects of fiscal shocks in labour markets

By Evi Pappa

Abstract

We study the mechanics of transmission of fiscal shocks to labour markets. We characterize a set of robust implications following government consumption, investment and employment shocks in a RBC and a New- Keynesian model and use part of them to identify shocks in the data. In line with the New-Keynesian story, shocks to government consumption and investment increase real wages and employment contemporaneously both in US aggregate and in US state data. The dynamics in response to employment shocks are mixed, but in many cases are inconsistent with the predictions of the RBC model

Topics: HB Economic Theory, HD Industries. Land use. Labor
Publisher: CEPR, London School of Economics and Political Science
Year: 2005
OAI identifier: oai:eprints.lse.ac.uk:524
Provided by: LSE Research Online
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://eprints.lse.ac.uk/524/1... (external link)
  • http://www.cepr.org (external link)
  • http://eprints.lse.ac.uk/524/ (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.