Labour taxes and unemployment evidence from a panel unobserved component model

Berger, Tino; Everaert, Gerdie

doi:10.1016/j.jedc.2009.09.010

Cited by 16 publications

(22 citation statements)

References 33 publications

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“…Accordingly, second-round effects are more likely to occur. Berger and Everaert (2007) show that only in the latter group of countries does a labour tax increase result in increased unemployment, which indicates that exactly those countries succeed in shifting the burden of the tax increase to the producers, which is supported by the results found in Daveri and Tabellini (1997). The fact that all countries for which we find a significant reaction of nominal wages belong to this group, is certainly not at odds with this theory.…”

Section: Second-round Effects As a Source Of Cross-country Differencessupporting

confidence: 78%

Oil and the Euro area economy

2009

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"We examine the macroeconomic effects of different types of oil shocks and the oil transmission mechanism in the Euro area. A comparison is made with the US and across individual member countries. First, we find that the underlying source of the oil price shift is crucial to determine the repercussions on the economy and the appropriate monetary policy reaction. Second, the transmission mechanism is considerably different compared to the US. In particular, inflationary effects in the US are mainly driven by a strong direct pass-through of rising energy prices and indirect effects of higher production costs. In contrast, Euro area inflation reacts sluggishly and is much more driven by second-round effects of increasing wages. The monetary policy reaction of the ECB to oil shocks is also strikingly different compared to the FED. The inflation objective, relative to the output stabilization objective, appears more important for Euro area monetary authorities than for the FED. Third, there are substantial asymmetries across member countries. These differences are due to different labour market dynamics which are further aggravated by a common monetary policy stance which does not fit all." Copyright (c) CEPR, CES, MSH, 2009.

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Section: Second-round Effects As a Source Of Cross-country Differencessupporting

confidence: 78%

Oil and the Euro area economy

2009

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“…The unobserved components models have been used in different economic applications, for estimating the natural level of the labor supply (Bull and Frydman [1983]), for modeling credibility of the monetary authority (Weber [1991]), for analyzing the GDP (Luginbuhl and Vos [1999], Morley et al [2003]), the Purchasing Power Parity (PPP) (Kleijn and van Dijk [2001]), consumption (Elwood [1998]), unemployment (Chung and Harvey [2000], Berger and Everaert [2009]), for modeling tax revenues (Koopman and Ooms [2003]), cycles (Chambers and McGarry [2002]) and for analyzing financial series (Cowan and Joutz [2006]), among others.…”

Section: Methodologies Of Estimation Of the Nirmentioning

confidence: 99%

Estimations of the natural rate of interest in Colombia

González-Molano¹,

Melo‐Velandia²,

Rojas³

et al. 2010

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Three methodologies to estimate the natural interest rate, NIR, are implemented for the Colombian economy. Two methods are statistical filters and the third involves some economic theory. The first method is based on unobserved components decomposition of the real interest rate and explores the statistical characteristics of the data. The second is a multivariate version of the Hodrick-Prescott filter augmented by an economic relationship, HPMV. The NIR in both cases is defined as the trend component of the market real interest rate; then, the NIR may be considered as a long-run real interest rate anchor for monetary policy. The third method consists in estimating a semi-structural model for a small open economy. In this case the NIR is defined as the interest rate that does not affect the output dynamics in the short run and assures output and inflation convergence to their long run equilibriums. This implies that the NIR is a medium-run anchor for monetary policy. Three features are observed in the dynamics of the NIR estimates for the period 2000-2009. The first part of the sample (2000)(2001)(2002)(2003) shows a downward trend, followed by a period of stabilization and upward trend (2004)(2005)(2006)(2007)(2008) and at the end of the sample the NIR start decreasing again. The NIR in the last quarter of the sample, 2009Q2, is around 3.1 in average.

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“…Many of the studies in this second group pay no attention to labor or product market rigidities (Dhont and Heylen 2008, 2009, Ohanian, Raffo, and Rogerson 2008, Olovsson 2009, Prescott 2004, Rogerson 2007). Others (e.g., Daveri and Tabellini 2000, Berger and Everaert 2010) emphasize that the effects of tax changes may depend on labor market institutions. Our aim in this paper is to test the explanatory power of both views econometrically in a panel of OECD countries in 1970–2007.…”

Section: Employment Rate In Hours In Percent 2003–07mentioning

confidence: 99%

“…Other authors have applied this idea to the effect of labor tax changes. Building on Calmfors and Driffill (1988), Daveri and Tabellini (2000) and Berger and Everaert (2010) show that the (un)employment effects of labor taxes are smaller (or even nonexistent) in highly decentralized and highly centralized/coordinated wage bargaining regimes. The U.S. and the UK represent the first regime, the Nordic countries are often taken as examples of the second regime.…”

Section: Institutions Fiscal Policy and Employment: Theoretical mentioning

confidence: 99%

Differences in Hours Worked in the OECD: Institutions or Fiscal Policies?

Berger

Heylen

2011

J of Money Credit Banking

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We study the determinants of the level and the evolution of per capita hours worked in a panel of OECD countries since the 1970s. Following Pesaran (2006), our empirical strategy allows for the possibility of crosssectionally correlated error terms due to unobserved common factors, which are potentially nonstationary. We find that much of the variation in per capita hours worked across countries and over time can be explained by differences in the level and structure of taxes and government expenditures. Differences in (the evolution of) labor and product market institutions have much less of a role to play. Our results show that a careful treatment of the time-series properties of the data is crucial.JEL codes: C33, E24, E62, H20

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Labour taxes and unemployment evidence from a panel unobserved component model

Cited by 16 publications

References 33 publications

Oil and the Euro area economy

Oil and the Euro area economy

Estimations of the natural rate of interest in Colombia

Differences in Hours Worked in the OECD: Institutions or Fiscal Policies?

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