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The Effects of Public Debt on Labor Demand in the United States

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  • Garcia-Jimenez, Carlos I.
  • Mishra, Ashok K.

Abstract

The 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.

Suggested Citation

  • Garcia-Jimenez, Carlos I. & Mishra, Ashok K., 2010. "The Effects of Public Debt on Labor Demand in the United States," 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida 56361, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea10:56361
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    References listed on IDEAS

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    More about this item

    Keywords

    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;

    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; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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