The Unemployment Effects of Fiscal Policy in Netherlands

Unal, Umut (2015): The Unemployment Effects of Fiscal Policy in Netherlands. Published in:

Abstract

This paper focuses on the effects of fiscal policy in Netherlands analyzed in a VAR context. Fiscal shocks are found to involve significant impacts on GDP, unemployment rate, consumption and investment. In this regard, Keynesian effects are observed. In addition, the results suggest that unemployment rises in response to a fiscal contraction whereas it falls following a fiscal expansion. When government spending increases output increases; when total net taxes increase output falls. A social security tax innovation also leads to a rise in unemployment rate. Moreover, the results indicate that the social security taxes is a more effective tool compared to total net taxes for policy-makers in Netherlands in terms of GDP and its private components.

• Item Type: MPRA Paper
• Language: English
• Keywords: Government Spending, Total Net Taxes, Social Security Taxes, Unemployment
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents

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