Format du dépôt |
Fichier |
Type de dépôt |
Pré-publication, Document de travail |
Titre |
en
Taking off into the Wind: Unemployment Risk and State-Dependent Government Spending Multipliers
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Résumé |
en
We propose a model with involuntary unemployment, incomplete markets, and nominal rigidity, in which the effects of government spending are state-dependent. An increase in government purchases raises aggregate demand, tightens the labor market and reduces unemployment. This in turn lowers unemployment risk and thus precautionary saving, leading to a larger response of private consumption than in a model with perfect insurance. The output multiplier is further amplified through a composition effect, as the fraction of high-consumption households in total population increases in response to the spending shock. These features, along with the matching frictions in the labor market, generate significantly larger multipliers in recessions than in expansions. As the pool of job seekers is larger during downturns than during expansions, the concavity of the job-finding probability with respect to market tightness implies that an increase in government spending reduces unemployment risk more in the former case than in the latter, giving rise to countercyclical multipliers.
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Auteur(s)
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Julien Albertini
1
, Stéphane Auray
2, 3
, Hafedh Bouakez
4, 5
, Aurélien Eyquem
1
1
GATE Lyon Saint-Étienne -
Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
( 102550 )
- 93, chemin des Mouilles 69130 Écully
6, rue Basse des Rives 42023 Saint-Étienne cedex 02
- France
-
École normale supérieure de Lyon ( 6818 )
;
-
Université Lumière - Lyon 2 ( 33804 )
;
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Université Claude Bernard Lyon 1 ( 194495 )
;
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Université de Lyon ( 301088 )
;
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Université Jean Monnet - Saint-Étienne ( 300284 )
;
-
Centre National de la Recherche Scientifique UMR5824 ( 441569 )
2
CREST -
Centre de Recherche en Économie et Statistique
( 2579 )
- 5, Avenue Henry Le Chatelier, 91120 Palaiseau
- France
-
Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] ( 244399 )
;
-
École polytechnique ( 300340 )
;
-
École Nationale de la Statistique et de l'Administration Économique ( 300604 )
;
-
Centre National de la Recherche Scientifique UMR9194 ( 441569 )
3
ULCO -
Université du Littoral Côte d'Opale
( 301404 )
- 1, place de l'Yser - BP 71022
59375 Dunkerque Cedex
- France
4
HEC Montréal -
HEC Montréal
( 304765 )
- 3000 Chemin de la Côte-Sainte-Catherine, Montréal, QC H3T 2A7
- Canada
5
CIREQ -
Centre interuniversitaire de recherche en économie quantitative
( 178230 )
- Centre interuniversitaire de recherche en économie quantitative Université de Montréal Pavillon Lionel-Groulx 3150, rue Jean-Brillant, local C-6088 Montréal (Québec) H3T 1N8
- Canada
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Langue du document |
Anglais
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Date de production/écriture |
2020
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Domaine(s) |
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Sciences de l'Homme et Société/Economies et finances
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Mots-clés (JEL) |
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D - Microeconomics/D.D5 - General Equilibrium and Disequilibrium/D.D5.D52 - Incomplete Markets
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E - Macroeconomics and Monetary Economics/E.E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy/E.E2.E21 - Consumption • Saving • Wealth
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E - Macroeconomics and Monetary Economics/E.E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook/E.E6.E62 - Fiscal Policy
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Référence interne |
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Working paper GATE 2020-02
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Mots-clés |
en
Government spending, Multipliers, Precautionary saving, State dependence, Unemployment risk
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