Studies of the effect of government spending on unemployment are potentially confounded by reverse causality. To … expenditure on road-building substantially reduces local unemployment …

reduced unemployment by 0.62 jobs per year. We allow for possible spatial effects, i.e. the propagation of the stimulus to …

rates and high, persistent, unemployment. An increase in government spending boosts economic activity and reduces the … unemployment rate both in the present and in the future. As a less disconcerting future spurs a rise in private consumption …, unemployment falls even further and triggers an additional rise in private demand, and so on. In a stylized model, I show that the …

This paper studies a model of equilibrium unemployment in which the ecacy of scal policy increases markedly in times of … unemployment But as a persistent rise in unemployment fuels pessimism, the economy is set on a downward spiral in which thrift … unemployment rate both in the present and in the future. Pessimism is replaced by optimism and the vicious cycle is turned into a …