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Fiscal Stimulus in an Endogenous Job Separation Model
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Ryuta Ray Kato
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Hiroaki Miyamoto
… We develop a dynamic stochastic general equilibrium model with labor search frictions in which job separation is endogenously determined. … We study effects of fiscal stimuli in the form of government spending and hiring subsidies.The prediction of our model is in contrast with earlier studies that assume exogenous job separation. … First, our model generates a larger size of the impact of a government spending shock on labor market variables than the model without endogenous separation. …
Economics & management series EMS-2013-02, 1-28, 2013-02-00
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