Economic Shocks and their Effects on Unemployment in the Euro Area Periphery under the EMU

Antonio Ribba () and Pietro Dallari

No 9245, EcoMod2016 from EcoMod

Abstract: In this paper we aim to investigate the effects of several types of shocks on unemployment in peripheral European countries under the EMU. We use a structural near-VAR model to account for the supranational conduct of monetary policy on the one hand, and domestic fiscal policy and financial shocks on the other hand. Our main findings are: (i) the unemployment multipliers of government spending shocks are higher than the ones associated with government revenues shocks, and they vary across countries; (ii) instability in the unemployment responses over time is marked, with evidence that a regime shift took place in some countries since 2007; (iii) fiscal and financial shocks are not among the long-term drivers of unemployment, but instead a more important role is played by Euro area-wide shocks, with a pre-eminent role for the common monetary policy shock.

Keywords: Greece; Ireland; Italy; Portugal; Spain.; Business cycles; Macroeconometric modeling (search for similar items in EconPapers)
Date: 2016-07-04
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Economic Shocks and their Effects on Unemployment in the Euro Area Periphery under the EMU (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ekd:009007:9245

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