Fiscal policy can reduce unemployment
Subtitle: but there is a less costly and more effective alternative
By: Roger E. A. Farmer.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- working paper 15021; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15021.
Publisher: National Bureau of Economic Research
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper uses a model with a continuum of equilibrium unemployment rates to explore the effectiveness of fiscal policy.  The existence of multiple steady state unemployment rates is explained by the absence of markets for the inputs to a search technology for matching unemployed workers with vacant jobs.  I explain the current financial crisis as a shift to a high unemployment equilibrium, induced by the self-fulfilling beliefs of market participants about asset prices.  Using this model, I ask two questions.  1) Can fiscal policy help us out of the crisis? 2) Is there an alternative to fiscal policy that is less costly and more effective? The answer to both questions is yes"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/11/2009.

Includes bibliographical references.

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