Cardiff University | Prifysgol Caerdydd ORCA
Online Research @ Cardiff 
WelshClear Cookie - decide language by browser settings

Equilibrium unemployment in a general equilibrium model with taxes

Dixon, Huw and Bhattarai, Keshab 2014. Equilibrium unemployment in a general equilibrium model with taxes. The Manchester School 82 (Supp 1) , pp. 90-128. 10.1111/manc.12066

[img]
Preview
PDF - Submitted Pre-Print Version
Download (713kB) | Preview

Abstract

The ratio of unemployed to vacancies has risen sharply in the UK after the recession of 2008/09. How harmful is it for the long run growth, equity and e¢ ciency and what sorts of long run cycles does it generate in the economy? With a dynamic computable general equilibrium model with Pissarides (1979, 2011) and Mortensen and Pissarides (1994) type equilibrium unemployment, impacts of tax-transfer programmes are assessed for the UK. The model contains more desirable structure of households and production sectors and includes more type of shocks in preferences, technology, trade and policy instruments for stochastic analyses than is usual in DSGE models. It assesses growth and cycles as well as equity and e¢ ciency e§ects of policies simultaneously. Improvements in the matching technology lowers the equilibrium unemployment and raises the long-run growth rate and life time utilities of households and reduces long run cycles. Matching could be made more e¢ cient by ináuencing the relative price system by optimal set of tax and transfer instruments. Better matching techniques can make transition of job-seekers to employment more e¢ cient so that the intertemporal labour-leisure and consumption-saving decisions have greater impacts on growth and redistribution reducing áuctuations in the economy.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HC Economic History and Conditions
Additional Information: Proceedings of the Money, Macroeconomics and Finance Research Group, 2013
Publisher: Wiley-Blackwell
Last Modified: 30 Jun 2019 05:50
URI: http://orca.cf.ac.uk/id/eprint/72595

Citation Data

Cited 1 time in Google Scholar. View in Google Scholar

Cited 1 time in Scopus. View in Scopus. Powered By Scopus® Data

Actions (repository staff only)

Edit Item Edit Item

Downloads

Downloads per month over past year

View more statistics