This paper develops a theory characterizing the effects of fiscal policy on unemployment over the business cycle. The … theory is based on a model of equilibrium unemployment in which jobs are rationed in recessions. Fiscal policy in the form of … government spending on public-sector jobs reduces unemployment, especially during recessions: the fiscal multiplier …

I develop a New Keynesian model in which a type of government multiplier doubles when unemployment rises from 5 percent … unemployment is high, the increase in tightness and resulting crowding-out are small. …

doubles when unemployment rises from 5% to 8%. Theoretically, such countercyclicality arises because of a nonlinearity, namely … in recessions but large in expansions. Hence, government consumption reduces unemployment much more in recessions than in …

We present a static model of aggregate demand and unemployment. The economy has a nonproduced good, a produced good … prices as parameters. We obtain the following results: (1) unemployment and unsold production prevail in equilibrium; (2 … and reduce unemployment. …

This paper analyzes optimal unemployment insurance over the business cycle in a search model in which unemployment … novel effects ignored in previous studies of optimal unemployment insurance. First, job-search efforts have little effect on … aggregate unemployment because the number of jobs available is limited, independently of matching frictions. Second, while job …

We present a static model of aggregate demand and unemployment. The economy has a nonproduced good, a produced good … prices as parameters. We obtain the following results: (1) unemployment and unsold production prevail in equilibrium; (2 … and reduce unemployment. …

This paper analyzes optimal unemployment insurance over the business cycle in a search model in which unemployment … novel effects ignored in previous studies of optimal unemployment insurance. First, job-search efforts have little effect on … aggregate unemployment because the number of jobs available is limited, independently of matching frictions. Second, while job …

This article develops a model of unemployment fluctuations. The model keeps the architecture of the general … affects unemployment as follows. An increase in aggregate demand leads firms to find more customers. This reduces the idle … time of their employees and thus increases their labor demand. This in turn reduces unemployment. We combine the …