Fiscal Shocks and Real Wages

Agustín S. Bénétrix ()

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: I estimate the short-run dynamic effect of fiscal shocks on real wages for a panel of euro area countries. The main findings are in line with the Neo-Keynesian predictions that real wages increase in response to spending shocks. However, the scale of the wage response depends on the type of government spending

Date: 2009-03-04
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