Journal article

Fiscal stimulus and labor market policies in europe

Publication Details
Author(s): Merkl C, Faia E, Lechthaler W
Publisher: Elsevier
Publication year: 2013
Volume: 37
Journal issue: 3
Pages range: 483-499
ISSN: 0165-1889
Language: English


Several contributions have recently assessed the size of fiscal multipliers both in RBC models and in New Keynesian models. This paper computes fiscal multipliers within a labor selection model with turnover costs and Nash bargained wages. We find that demand stimuli yield small multipliers, as they have little impact on hiring and firing decisions. By contrast, hiring subsidies, and short-time work (German "Kurzarbeit") deliver large multipliers, as they stimulate job creation and employment.

Focus Area of Individual Faculties

How to cite
APA: Merkl, C., Faia, E., & Lechthaler, W. (2013). Fiscal stimulus and labor market policies in europe. Journal of Economic Dynamics & Control, 37(3), 483-499.

MLA: Merkl, Christian, Ester Faia, and Wolfgang Lechthaler. "Fiscal stimulus and labor market policies in europe." Journal of Economic Dynamics & Control 37.3 (2013): 483-499.

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