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Recent literature on the European debt crisis emphasizes that rising external trade and lending imbalances between the European Monetary Union's (EMU) Northern and Southern member states served as a crucial determinant behind speculative divergence between these two regions. However, these...
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stand out. First, fiscal rules enhance the positive effects of discretionary fiscal policy on output and unemployment if …
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This paper shows how fiscal policy affects unemployment in a New Keynesian model with search and matching frictions and …. Several findings stand out. First, unemployment mult ipliers for spending and consumption tax cuts are substantial, even …
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