scholarly journals A Theory of Countercyclical Government Multiplier

2014 ◽  
Vol 6 (1) ◽  
pp. 190-217 ◽  
Author(s):  
Pascal Michaillat
Keyword(s):  
Labor Market ◽  
Public Sector ◽  
Labor Supply ◽  
Labor Demand ◽  
New Keynesian ◽  
Crowding Out ◽  
New Keynesian Model ◽  
Public Employment ◽  
The Public ◽  
Keynesian Model

I develop a New Keynesian model in which a type of government multiplier doubles when unemployment rises from 5 percent to 8 percent. This multiplier indicates the additional number of workers employed when one worker is hired in the public sector. Graphically, in equilibrium, an upward-sloping quasi-labor supply intersects a downward-sloping labor demand in a (employment, labor market tightness) plane. Increasing public employment stimulates labor demand, which increases tightness and therefore crowds out private employment. Critically, the quasi-labor supply is convex. Hence, when labor demand is depressed and unemployment is high, the increase in tightness and resulting crowding-out are small. (JEL E12, E24, E32, E62)

scholarly journals The DEA Method and its Application Possibilities for Measuring Efficiency in the Public Sector—The Case of Local Public Employment Services

Economies ◽  
2021 ◽  
Vol 9 (2) ◽  
pp. 80
Author(s):  
Ewa Cichowicz ◽  
Ewa Rollnik-Sadowska ◽  
Monika Dędys ◽  
Maria Ekes
Keyword(s):  
Labor Market ◽  
Public Sector ◽  
Supply And Demand ◽  
Policy Instruments ◽  
Public Employment ◽  
Employment Services ◽  
The Public ◽  
Measuring Efficiency ◽  
Dea Method ◽  
The Unemployed

Public Employment Services (PES) are identified as important institutions in the process of improving the match between supply and demand in the labor market, which, despite their importance, still do not achieve the desired efficiency. The indicated problem is partly due to the lack of appropriate evaluation methods for the applied labor market policy instruments. This paper aims to verify the possibility of using the two-stage Data Envelopment Analysis (DEA) method in measuring the efficiency of public sector entities. The authors focused on 39 PES operating in Mazovia province, Poland in 2019. In the first stage, the model of technical efficiency of local PES included six variables (four inputs and two outputs). Only seven PES obtained full efficiency. The inefficiency of analyzed PES varied from about 1% to 80%. In the second stage, the attention focuses on the relationship between true unknown efficiency and its determinants (five environmental variables, both demand and supply oriented). Then, the regression coefficients and confidence intervals showed that three out of five variables influence the efficiency results, the share of the long-term unemployed, the share of the unemployed under 30, and the share of the unemployed over 50 in the total number of unemployed.

A NOTE ON SIMPLE MONETARY POLICY RULES WITH LABOR MARKET AND FINANCIAL FRICTIONS

2018 ◽  
Vol 22 (5) ◽  
pp. 1321-1344 ◽  
Author(s):  
Šarūnas Girdėnas
Keyword(s):  
Labor Market ◽  
Bargaining Power ◽  
Financial Frictions ◽  
Production Costs ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Bargaining Process ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Keynesian Model

We consider a New-Keynesian model with financial and labor market frictions where firms borrowing is limited by the enforcement constraint. The wage is set in a bargaining process where the firm's shareholder and worker share the production surplus. As debt service is considered to be a part of production costs, firms borrow to reduce the surplus which allows to lower the wage. We study the model's response to financial shock under two Taylor-type interest rate rules: first one responds to inflation and borrowing, second one to inflation and unemployment. We have found that the second rule delivers better policy in terms of the welfare measure. Additionally, we show that the feedback on unemployment in this rule depends on the extent of workers' bargaining power.

scholarly journals Labor Markets and Monetary Policy: A New Keynesian Model with Unemployment

2010 ◽  
Vol 2 (2) ◽  
pp. 1-30 ◽  
Author(s):  
Olivier Blanchard ◽  
Jordi Galí
Keyword(s):  
Monetary Policy ◽  
Labor Market ◽  
Labor Markets ◽  
New Keynesian ◽  
Price Setting ◽  
Efficient Allocation ◽  
New Keynesian Model ◽  
Optimal Monetary Policy ◽  
Productivity Shocks ◽  
Keynesian Model

We construct a utility-based model of fluctuations with nominal rigidities and unemployment. We first show that under a standard utility specification, productivity shocks have no effect on unemployment in the constrained efficient allocation. That property is also shown to hold, despite labor market frictions, in the decentralized equilibrium under flexible prices and wages. Inefficient unemployment fluctuations arise when we introduce real-wage rigidities. As a result, in the presence of staggered price setting by firms, the central bank faces a trade-off between inflation and unemployment stabilization, which depends on labor market characteristics. We draw the implications for optimal monetary policy. (JEL E12, E24, E52)

Implications of higher retirement age for the labor market

2017 ◽  
pp. 22-39 ◽  
Author(s):  
M. Ivanova ◽  
A. Balaev ◽  
E. Gurvich
Keyword(s):  
Economic Growth ◽  
Labor Market ◽  
Labor Supply ◽  
Labor Force ◽  
Labor Demand ◽  
Retirement Age ◽  
Demographic Trends ◽  
Men And Women ◽  
Demographic Projections ◽  
The Impact

The paper considers the impact of the increase in retirement age on labor supply and economic growth. Combining own estimates of labor participation and demographic projections by the Rosstat, the authors predict marked fall in the labor force (by 5.6 million persons over 2016-2030). Labor demand is also going down but to a lesser degree. If vigorous measures are not implemented, the labor force shortage will reach 6% of the labor force by the period end, thus restraining economic growth. Even rapid and ambitious increase in the retirement age (by 1 year each year to 65 years for both men and women) can only partially mitigate the adverse consequences of demographic trends.

scholarly journals Public Debt and Changing Inflation Targets

2016 ◽  
Vol 8 (4) ◽  
pp. 142-176 ◽  
Author(s):  
Michael U. Krause ◽  
Stéphane Moyen
Keyword(s):  
Central Bank ◽  
Public Debt ◽  
Pronounced Effect ◽  
New Keynesian ◽  
Moderate Increase ◽  
New Keynesian Model ◽  
Inflation Target ◽  
Keynesian Model ◽  
Maturity Structure ◽  
Inflation Targets

What are the effects of a higher central bank inflation target on the burden of real public debt? Several recent proposals have suggested that even a moderate increase in the inflation target can have a pronounced effect on real public debt. We consider this question in a New Keynesian model with a maturity structure of public debt and an imperfectly observed inflation target. We find that moderate changes in the inflation target only have significant effects on real public debt if they are essentially permanent. Moreover, the additional benefits of not communicating a change in the inflation target are minor. (JEL E12, E31, E52, H63)

scholarly journals An estimated New-Keynesian model with unemployment as excess supply of labor

2014 ◽  
Vol 40 ◽  
pp. 338-359 ◽  
Author(s):  
Miguel Casares ◽  
Antonio Moreno ◽  
Jesús Vázquez
Keyword(s):  
New Keynesian ◽  
New Keynesian Model ◽  
Excess Supply ◽  
Keynesian Model
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