Lukkezen, Jasper; Teulings, Coen N - C.E.P.R. Discussion Papers - 2013
analytic solutions for optimal policy. The variables in our reducedform model – growth, unemployment, primary surplus – have a … currently followed by policy makers responds procyclically to both growth and unemployment shocks, and does so much slower than …This paper derives and estimates rules for fiscal policy that prescribe the optimal response to changes in unemployment …