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Towards a quantitative theory of automatic stabilizers: The role of demographics

Alexandre Janiak and Paulo Santos Monteiro ()

Journal of Monetary Economics, 2016, vol. 78, issue C, 35-49

Abstract: Employment volatility is larger for young and old workers than for the prime aged. At the same time, in countries with high tax rates, the share of total hours supplied by young/old workers is lower. These two observations imply a negative correlation between government size and business cycle volatility. This paper assesses in a heterogeneous agent OLG model the quantitative importance of these two facts to account for the empirical relation between government size and macroeconomic stability.

Keywords: Automatic stabilizers; Distortionary taxes; Demographics (search for similar items in EconPapers)
Date: 2016
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Related works:
Working Paper: Towards a quantitative theory of automatic stabilizers: the role of demographics (2014) Downloads
Working Paper: Towards a quantitative theory of automatic stabilizers: the role of demographics (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:78:y:2016:i:c:p:35-49

DOI: 10.1016/j.jmoneco.2015.12.006

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