Structural estimates of equilibrium unemployment in six OECD economies

Albert van der Horst

No 19, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: In Europe, neither unemployment rates nor institutions are uniform. In the EMU, countries have coordinated their monetary policy, and fiscal policy might follow. In Europe, neither unemployment rates nor institutions are uniform. In the EMU, countries have coordinated their monetary policy, and fiscal policy might follow. Does convergence in fiscal policy imply that unemployment rates will converge, too, or is diversified fiscal policy desirable? An answer to this question requires insight into the dependence on fiscal policy of the unemployment rate in equilibrium. This study estimates the equilibrium rate of unemployment and shows that it has been affected significantly by taxes and benefits. Uniform fiscal policy would not, however, harmonise the unemployment rates because the impact of policy varies widely across the OECD economies.

JEL-codes: E24 E60 J30 (search for similar items in EconPapers)
Date: 2003-06
New Economics Papers: this item is included in nep-eec and nep-ifn
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:19

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