Employment and growth in Europe and the US - The role of fiscal policy composition

T. Dhont () and F. Heylen ()
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F. Heylen: -

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: We analyze the impact of the composition of fiscal policy on employment and long-run growth. Our theoretical model builds on Barro (JPE, 1990) which we extend by endogenizing the decision to work and by allowing three kinds of government expenditures and three kinds of taxes. The model explains what we basically observe in the data for European countries: relatively high employment and growth in the Nordic countries, but poor employment and low growth in the core countries of the euro area. Our model can also explain employment and growth in the US.

Keywords: fiscal policy; taxes; transfers; government spending; employment; endogenous growth (search for similar items in EconPapers)
JEL-codes: E24 E62 J22 O41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2006-11
New Economics Papers: this item is included in nep-eec, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Employment and growth in Europe and the US--the role of fiscal policy composition (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:06/420

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