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Equilibrium Unemployment in a General Equilibrium Model with Taxes
Author(s) -
Bhattarai Keshab,
Dixon Huw
Publication year - 2014
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12066
Subject(s) - dynamic stochastic general equilibrium , economics , unemployment , general equilibrium theory , computable general equilibrium , welfare , equity (law) , growth model , consumption (sociology) , matching (statistics) , econometrics , macroeconomics , microeconomics , monetary policy , social science , statistics , mathematics , sociology , political science , law , market economy
With a dynamic computable general equilibrium model with P issarides and M ortensen and P issarides type equilibrium unemployment, impacts of tax‐transfer programmes are assessed for the UK . The model contains more desirable structure of households and production sectors and includes more type of shocks in preferences, technology, trade and policy instruments for stochastic analyses than is usual in dynamic stochastic general equilibrium ( DSGE ) models. It assesses growth and cycles as well as equity and efficiency effects of policies in the long run simultaneously. The labour–leisure and consumption–saving decisions impact more on growth and welfare of households with efficient matching making transitions to employment easier for job seekers.