Interest rate volatility and its effect on unemployment in European Union and the United States
Journal of Economics and Business - SPOUDAI
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Title |
Interest rate volatility and its effect on unemployment in European Union and the United States
Interest rate volatility and its effect on unemployment in European Union and the United States |
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Creator |
Καλλιανιώτης, Ιωάννης Ν.
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Subject |
Οικονομική ολοκλήρωση; Μακροοικονομική
Economic integration; Macroeconomics |
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Description |
In a market oriented economy, the increase in (industrial) production will increase demand for labor and unemployment will decline. The same will happen with an expansionary monetary and fiscal policy. The risk is expected to have a positive (workers will supply more labor) or a negative (firms will demand less labor) effect on employment. Here, a simple expectations- augmented Phillips curve, combined with the equation of exchange and through an IS curve, gives the optimal unemployment rate. A GARCH (p, q) process is used to determine the risk (measured with the volatility of the real interest rate) in our economy. The results show that the EU country-members are different from each other and distinct from the U.S. market- oriented economy. Consequently, the current European Union is not working as a free market economy and might be required more time to adjust in the future with all these tremendous. structural, cost, urbanization, and demographic changes and its rapid expansion with ten new members from this year. |
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Publisher |
University of Piraeus
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Date |
2007-04-02
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Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — |
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Format |
application/pdf
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Identifier |
http://spoudai.unipi.gr/index.php/spoudai/article/view/1216
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Source |
SPOUDAI - Journal of Economics and Business; Vol 54, No 3 (2004); 9-36
2241-424X 1105-8919 |
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Language |
eng
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Relation |
http://spoudai.unipi.gr/index.php/spoudai/article/view/1216/1295
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Rights |
Copyright (c) 2007 SPOUDAI - Journal of Economics and Business
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