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The effects of macroeconomic policy shocks on the UK labour market

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  • Athanasios Tagkalakis

    (Council of Economic Advisers, Ministry of Economy and Finance, Greece)

Abstract

This paper discusses the dynamic response of employment, average hours, and real wages to macroeconomic policy shocks in the UK in the period 1970 Q1-2003 Q1. Following a monetary policy shock the adjustment of labour input is primarily along the extensive margin. However, there is also significant adjustment along the intensive margin 1 year after the shock. A government spending shock leads to a fall in employment and hours, whereas real wages rise. This is attributed to the wage bill component of government consumption. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Athanasios Tagkalakis, 2006. "The effects of macroeconomic policy shocks on the UK labour market," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 11(3), pages 229-244.
  • Handle: RePEc:ijf:ijfiec:v:11:y:2006:i:3:p:229-244 DOI: 10.1002/ijfe.295
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    Cited by:

    1. Athanasios Tagkalakis, 2013. "The unemployment effects of fiscal policy: recent evidence from Greece," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-32, December.
    2. Agustín Bénétrix & Philip Lane, 2010. "Fiscal Shocks and The Sectoral Composition of Output," Open Economies Review, Springer, vol. 21(3), pages 335-350, July.
    3. Burton A. Abrams & Siyan Wang, 2007. "Government Outlays, Economic Growth and Unemployment: A VAR Model," Working Papers 07-13, University of Delaware, Department of Economics.

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