{
  "title": "A Fiscal Stimulus and Jobless Recovery",
  "publication": "IMF Working Papers, January 18, 2013",
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  "summary": "We analyse the effects of a government spending expansion in a DSGE model with Mortensen-Pissarides labour market frictions, deep habits in private and public consumption, investment adjustment costs, a constant-elasticity-of-substitution (CES) production function, and adjustments in employment both",
  "sections": [
    {
      "heading": "Research question and model setup",
      "content": "- Research question: Analyze the effects of a government spending expansion.\n- Model features:\n  - DSGE model with Mortensen-Pissarides labour market frictions.\n  - Deep habits in private and public consumption.\n  - Investment adjustment costs.\n  - Constant-elasticity-of-substitution (CES) production function.\n  - Adjustments in employment at both the intensive and the extensive margin."
    },
    {
      "heading": "Key findings",
      "content": "- The combination of deep habits and CES technology is crucial for the model's behavior.\n- Presence of deep habits:\n  - Magnifies the responses of macroeconomic variables to a fiscal stimulus.\n- Elasticity of substitution between capital and labour:\n  - When set in the range of available estimates, the model can produce a scenario compatible with the observed jobless recovery.\n- The model can account for a fiscal-stimulus episode that raises aggregate activity without producing a commensurate increase in employment (jobless recovery) given the specified features."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Consumption, Expenditure, Fiscal policy, Fiscal stimulus, Labor, National accounts, Unemployment\n- Keywords: CES production function, CES technology, Consumption, deep habits, depreciation rate, fiscal policy, Fiscal stimulus, government spending, government spending expansion, jobless recovery, labor market search-match frictions, unemployment, unemployment multiplier, WP\n\n---\n\n Content in this bundle\n\n- wp1317\n  - wp1317 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1317 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/a-fiscal-stimulus-and-jobless-recovery-40259"
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    "Authors: Cristiano Cantore, Paul L Levine, Giovanni Melina",
    "Published: January 18, 2013",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475595338.001",
    "Research question: Analyze the effects of a government spending expansion.",
    "Model features:",
    "The combination of deep habits and CES technology is crucial for the model's behavior.",
    "Presence of deep habits:",
    "Elasticity of substitution between capital and labour:",
    "The model can account for a fiscal-stimulus episode that raises aggregate activity without producing a commensurate increase in employment (jobless recovery) given the specified features.",
    "Subject: Consumption, Expenditure, Fiscal policy, Fiscal stimulus, Labor, National accounts, Unemployment",
    "Keywords: CES production function, CES technology, Consumption, deep habits, depreciation rate, fiscal policy, Fiscal stimulus, government spending, government spending expansion, jobless recovery, labor market search-match frictions, unemployment, unemployment multiplier, WP",
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