The Effects of Public Debt on Labor Demand in the United States
AbstractThe relationship between appreciation of the exchange rate and employment is investigated in the period 1980-2008 for the United States. Previous literature has found a negative relationship, studying as channels of transmission the role of exports, substitution of factors of production, terms of trade, openness, and productivity. This study endeavors to shed some light on the role of government debt on determining the level of employment through the exchange rate. The mechanism of transmission is defined. The model is derived from a standard Cobb Douglas production function having government debt affecting the growth of productivity. Exchange rate appreciations and increasing public debt were found to be detrimental to employment.
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Bibliographic InfoPaper provided by Southern Agricultural Economics Association in its series 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida with number 56361.
Date of creation: 06 Feb 2010
Date of revision:
Unemployment rate; government; budget deficit; exchange rate; trade deficit; FDI; Financial Economics; International Development; Labor and Human Capital; Political Economy; Public Economics; F31; J01; E24; E62;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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