Resource title

European Integration and Employment: A New Role for Active Fiscal Policies?

Resource image

image for OpenScout resource :: European Integration and Employment: A New Role for Active Fiscal Policies?

Resource description

This paper theoretically investigates the impact of European integration on employment by developing a new-keynesian model where fiscal policy effectively reduces firms? market power. Stronger product market competition is shown to reduce the marginal ability of governments to improve employment through public consumption. As competition crowds out fiscal spending, the positive impact of markets integration on employment is weakened. Moreover, in a context where national goods? demand becomes ?global?, the marginal benefit for each national fiscal authority of increasing public consumption is lower than the marginal benefit for the community. This result stresses one source of coordination failure within the EMU.

Resource author

Donatella Gatti

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/21443

Resource license

Adapt according to the presented license agreement and reference the original author.