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近期重要研究成果

Fiscal Consolidation with Public Wage Reductions (with Hsieh-Yu Lin, Nora Traum, and Shu-Chun S. Yang, accepted by JOURNAL OF MONEY, CREDIT, & BANKING)

  • 作者 張俊仁
    林雪瑜
    Nora Traum
    楊淑珺
  • 摘要 A New Keynesian model with government production, public compensation, and unemployment is fit to U.S. data to study the macroeconomic and fiscal effects of public wage reductions. We find that accounting for the type of government spending is crucial for its macroeconomic implications. Although reductions in public wages and government purchases of goods have similar effects on total output and the fiscal balance, the former can raise private output slightly, in contrast to the substantial contractionary effects of the latter. In addition, the baseline estimation finds that exogenous public wage reductions decrease private wages. Model counterfactuals show that sufficiently rigid nominal private wages can reverse the response of private wages, as the rigidity dampens the labor reallocation effect from the public to private sector that exerts downward pressure on private wages.
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