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Chugh, Sanjay K.; Lechthaler, Wolfgang; Merkl, Christian - 2016

This paper characterizes long-run and short-run optimal fiscal policy in the labor selection framework. In a calibrated non-Ramsey decentralized equilibrium, labor market volatility is inefficient. Keeping fixed the structural parameters, the Ramsey government achieves efficient labor market...

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Optimal fiscal policy with labor selection

Chugh, Sanjay K.; Lechthaler, Wolfgang; Merkl, Christian - 2015 - This draft: October 25, 2015

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