[cid:image003.png@01D44F54.60C7EFF0][JVI_2011] Joint Vienna Macroeconomics Seminar The Joint Vienna Institute and the Institute for Advanced Studies (IHS) cordially invite you to the following Joint Vienna Macroeconomics Seminar: Ruy Lama (IMF)<https://www.ihs.ac.at/events/detail/event/termin/jvm-seminar-ruy-lama-imf/> Date: Friday, September 27, 2019 11:00 a.m. Venue: Institute for Advanced Studies (IHS), Salon, 1st floor Josefstädter Straße 39, 1080 Vienna Fiscal austerity and unemployment Abstract: This paper studies the joint dynamics of fiscal deficits and unemployment in a neoclassical growth model with distortionary taxation, labor market search frictions, and real wage rigidities. First, we show that a tax increase or a reduction in government spending can improve the fiscal balance at the expense of a higher unemployment rate. However, under a scenario of rigid wages and productivity gains, it is possible to achieve a simultaneous reduction of the fiscal deficit and the unemployment rate. Second, we analyze the Swedish fiscal consolidation episode of the 1990s through the lens of the model. The model is capable of reproducing the simultaneous reduction in fiscal deficits and unemployment observed during this episode. Counterfactual simulations show that in the absence of TFP gains and rigid wages, fiscal consolidation measures alone would not have eliminated fiscal deficits, and the unemployment rate would have reached double digit levels. We are looking forward to seeing you! Please register by email at event@ihs.ac.at<mailto:event@ihs.ac.at?subject=Joint%20Vienna%20Macroeconomics%20Seminar,%20Sept%2027,%202019>. Thank you. Impressum<https://www.ihs.ac.at/services-for-ihs-members/impressum/> Institut für Höhere Studien - Institute for Advanced Studies (IHS) Josefstädter Straße 39, 1080 Vienna How to get to the IHS<https://www.ihs.ac.at/about/contact/how-to-get-to-the-ihs/> Tel: +43-1-59991-0 Fax: +43-1-59991-555 Email: office(at)ihs.ac.at<mailto:office@ihs.ac.at> Web: www.ihs.ac.at<http://www.ihs.ac.at/> ZVR-Zahl: 066207973 Diese Zusendung erfolgt entsprechend den Bestimmungen des TKG 247107. Sollten Sie keine weiteren Zusendungen wuenschen, senden Sie uns bitte eine kurze Mitteilung: event@ihs.ac.at<mailto:event@ihs.ac.at>. und an noeg-l@wu.ac.at<mailto:noeg-l@wu.ac.at> (https://mailman.wu.ac.at/mailman/listinfo/noeg-l.) Unsere Datenschutzerklärung finden Sie hier.<https://ihs.ac.at/de/datenschutzerklaerung> If you no longer wish to receive our mailings please send an e-mail to: event@ihs.ac.at<mailto:event@ihs.ac.at>. Also sent to noeg-l@wu.ac.at<mailto:noeg-l@wu.ac.at> (https://mailman.wu.ac.at/mailman/listinfo/noeg-l.) You can find our privacy policy here.<https://ihs.ac.at/privacy-policy>