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New-keynesian or RBC transmission? The effects of fiscal shocks in labour markets

Pappa, Evi (2005) New-keynesian or RBC transmission? The effects of fiscal shocks in labour markets. 5313. CEPR, London School of Economics and Political Science, London, UK. (Unpublished)

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Abstract

We study the mechanics of transmission of fiscal shocks to labour markets. We characterize a set of robust implications following government consumption, investment and employment shocks in a RBC and a New- Keynesian model and use part of them to identify shocks in the data. In line with the New-Keynesian story, shocks to government consumption and investment increase real wages and employment contemporaneously both in US aggregate and in US state data. The dynamics in response to employment shocks are mixed, but in many cases are inconsistent with the predictions of the RBC model.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.cepr.org
Additional Information: Copyright © 2005 Evi Pappa.
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Sets: Departments > Economics
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 5313
Date Deposited: 12 Dec 2005
URL: http://eprints.lse.ac.uk/524/

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