The cyclicality of consumption, wages and employment of the public sector in the euro area

Ana Lamo, Ludger Schuknecht and Javier Pérez

No 757, Working Paper Series from European Central Bank

Abstract: This study examines the business cycle behaviour of public consumption and its main components; the public wage bill (including compensation per employee and public employment) and intermediate consumption in the euro area aggregate, euro area countries and a group of selected non-euro area OECD countries (Denmark, Sweden, the UK, Japan and the US). It looks across a large number of variables and methods, using annual data from 1960 to 2005. It finds robust evidence supporting that public consumption, wages and employment co-move with the business cycle in a pro-cyclical manner with 1-2 year lags, notably for the euro area aggregate and euro area countries. The findings reflect mainly the correlation between cyclical developments (automatic stabilizers), but also point to the important role of pro-cyclical discretionary fiscal policies. JEL Classification: E62, E63, H50

Keywords: filtering; Public consumption; public employment; public wages; stylized facts; thick modelling (search for similar items in EconPapers)
Date: 2007-05
Note: 337346
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp757.pdf (application/pdf)

Related works:
Journal Article: The cyclicality of consumption, wages and employment of the public sector in the euro area (2013)
Working Paper: The Cyclicality of Consumption, Wages and Employment of the Public Sector in the Euro Area (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:2007757

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().