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The Unemployment Effects of Fiscal Policy in Netherlands

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  • Unal, Umut

Abstract

This paper focuses on the effects of fiscal policy in Netherlands analyzed in a VAR context. Fiscal shocks are found to involve significant impacts on GDP, unemployment rate, consumption and investment. In this regard, Keynesian effects are observed. In addition, the results suggest that unemployment rises in response to a fiscal contraction whereas it falls following a fiscal expansion. When government spending increases output increases; when total net taxes increase output falls. A social security tax innovation also leads to a rise in unemployment rate. Moreover, the results indicate that the social security taxes is a more effective tool compared to total net taxes for policy-makers in Netherlands in terms of GDP and its private components.

Suggested Citation

  • Unal, Umut, 2015. "The Unemployment Effects of Fiscal Policy in Netherlands," MPRA Paper 81433, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:81433
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    References listed on IDEAS

    as
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    Cited by:

    1. Umut UNAL, 2015. "Rethinking The Effects Of Fiscal Policy On Macroeconomic Aggregates: A Disaggregated Svar Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 120-135, September.

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    More about this item

    Keywords

    Government Spending; Total Net Taxes; Social Security Taxes; Unemployment;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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