vacancies and a hiring subsidy. This paper finds that the effects of job creation subsides on unemployment differ between models … with and without endogenous job separation. While a positive job creation subsidy shock lowers unemployment in a model … without endogenous job separation, it increases unemployment in a model with endogenous job separation. We also find that …

Focusing on both hiring and firing margins, this paper revisits effects of fiscal expansion on unemployment. We develop … job finding, separation, and unemployment rates to a government spending shock, obtained from estimating a structural VAR … model with the U.S. data. However, our model fails to capture the response of vacancies and the volatility of unemployment. …

Focusing on both hiring and firing margins, this paper revisits effects of fiscal expansion on unemployment. We provide … unemployment in the U.S. by using a structural VAR model. We then develop a DSGE model with search frictions where job separation … unemployment rates to a government spending shock. We also demonstrate that model's predictions are in contrast with earlier …

find that the unemployment rate falls and employment rises following an increase in government spending. We also find that … fiscal expansion affects flows in and out of unemployment. While an increase in government spending increases the job …

This paper re-visits effects of fiscal expansion on employment and unemployment by focusing on both hiring and firing … separation. Second, while an increase in hiring subsidies increases employment and reduces unemployment in the model without … endogenous separation, it reduces employment and increases unemployment in our model. …

reduces unemployment duration but increases incidence with an ambiguous effect on overall employment. A firing tax has the … offsets the distortions on the job destruction margin induced by unemployment compensation and employment protection policy …

find that the unemployment rate falls and employment rises following an increase in government spending. We also find that … fiscal expansion affects flows in and out of unemployment. While an increase in government spending increases the job …

This paper develops a theory characterizing the effects of fiscal policy on unemployment over the business cycle. The … theory is based on a model of equilibrium unemployment in which jobs are rationed in recessions. Fiscal policy in the form of … government spending on public-sector jobs reduces unemployment, especially during recessions: the fiscal multiplier …

This paper studies a model of equilibrium unemployment in which the ecacy of scal policy increases markedly in times of … unemployment But as a persistent rise in unemployment fuels pessimism, the economy is set on a downward spiral in which thrift … unemployment rate both in the present and in the future. Pessimism is replaced by optimism and the vicious cycle is turned into a …