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Structural Estimates of Equilibrium Unemployment in Six OECD Economies

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In Europe, neither unemployment rates nor institutions are uniform. In the EMU, countries have coordinated their monetary policy, and fiscal policy might follow. Does convergence in fiscal policy imply that unemployment rates will converge, too, or is diversified fiscal policy desirable? An answer to this question requires insight into the dependence on fiscal policy of the unemployment rate in equilibrium. This study estimates the equilibrium rate of unemployment and shows that it has been affected significantly by taxes and benefits. Uniform fiscal policy would not, however, harmonise the unemployment rates because the impact of policy varies widely across the OECD economies.

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Paper provided by European Network of Economic Policy Research Institutes in its series Economics Working Papers with number 022.

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Length: 36 pages
Date of creation: Jul 2003
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Handle: RePEc:epr:enepwp:022

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Cited by:
  1. Demougin, Dominique & Helm, Carsten, 2011. "Job matching when employment contracts suffer from moral hazard," European Economic Review, Elsevier, vol. 55(7), pages 964-979.
  2. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Ulrich Fritsche & Camille Logeay & Kirsten Lommatzsch & Katja Rietzler & Sabine Stephan & Rudolf Zwiener unter Mitarb. von Cansel Kiziltepe & Christian Proano-Acosta, 2005. "Auswirkungen von länderspezifischen Differenzen in der Lohn-, Preisniveau- und Produktivitätsentwicklung auf Wachstum und Beschäftigung in den Ländern des Euroraums: Endbericht ; Forschungsprojekt," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 8, number pbk8, May.
  4. Dominique Demougin & Carsten Helm, 2009. "Incentive Contracts and Efficient Unemployment Benefits," CESifo Working Paper Series 2670, CESifo Group Munich.
  5. Darius Hinz & Camille Logeay, 2006. "Forecasting Employment for Germany," IMK Working Paper 01-2006, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute, revised Jan 2006.
  6. Cosmin ENACHE, 2012. "Unemployment Benefit, Minimum Wage And Average Salary Earnings In Romania," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 10, pages 85-96, December.
  7. Alho, Kari O.E. & Nikula, Nuutti, 2006. "Productivity, Empoyment and Taxes - Evidence on the Potential Trade-offs and Impacts in the EU," Discussion Papers 1054, The Research Institute of the Finnish Economy.
  8. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
  9. Katarzyna Budnik, 2012. "Do those who stay work less? On the impact of emigration on the measured TFP in Poland," National Bank of Poland Working Papers 113, National Bank of Poland, Economic Institute.
  10. Leon Bettendorf & Albert van der Horst & Ruud A. de Mooij, 2007. "Corporate Tax Policy and Unemployment in Europe: An Applied General Equilibrium Analysis," Tinbergen Institute Discussion Papers 07-056/2, Tinbergen Institute.
  11. repec:spo:wpecon:info:hdl:2441/f4rshpf3v1umfa09lat19ap14 is not listed on IDEAS
  12. Alho, Kari & Nikula, Nuutti, 2007. "Productivity, Employment and Taxes - A SVAR Analysis of Trade-offs and Impacts," Discussion Papers 1074, The Research Institute of the Finnish Economy.
  13. Ruud de Mooij, 2004. "Towards efficient unemployment insurance in the Netherlands," CPB Memorandum 100, CPB Netherlands Bureau for Economic Policy Analysis.
  14. Frédéric Reynès, 2006. "La formation des salaires et le concept de taux de chômage d’équilibre. Une tentative de réconciliation des courbes Wage Setting et de Phillips," Sciences Po publications info:hdl:2441/f4rshpf3v1u, Sciences Po.

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