Externality in labor supply and government spending

Fève, Patrick, Matheron, Julien and Sahuc, Jean-Guillaume (2011) Externality in labor supply and government spending. Economics Letters, 112 (3). pp. 273-276.

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Official URL: http://tse-fr.eu/pub/25729


Standard business cycle models face difficulties generating (i) government spending multipliers exceeding unity and (ii) stabilizing effects of government size. Using a simple model with externality in labor supply, we show that a sufficient degree of complementarity between aggregate and private labor supplies is key to reproducing these stylized facts.

Item Type: Article
Language: English
Date: September 2011
Refereed: Yes
Uncontrolled Keywords: Externality, Labor supply, Government spending multiplier, Government size
JEL codes: E32 - Business Fluctuations; Cycles
E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:24
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:25729
URI: http://publications.ut-capitole.fr/id/eprint/15237

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