Journal Article
No. 2013-42 | November 25, 2013
Unemployment Benefits and Financial Leverage in an Agent Based Macroeconomic Model

Abstract

This paper is aimed at investigating the effects of government intervention through unemployment benefits on macroeconomic dynamics in an agent based decentralized matching framework. The major result is that the presence of such a public intervention in the economy stabilizes the aggregate demand and the financial conditions of the system at the cost of a modest increase of both the inflation rate and the ratio between public deficit and nominal GDP. The successful action of the public sector is sustained by the central bank which is committed to buy outstanding government securities.

JEL Classification:

E32, C63

Assessment

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Cite As

Luca Riccetti, Alberto Russo, and Mauro Gallegati (2013). Unemployment Benefits and Financial Leverage in an Agent Based Macroeconomic Model. Economics: The Open-Access, Open-Assessment E-Journal, 7 (2013-42): 1—44. http://dx.doi.org/10.5018/economics-ejournal.ja.2013-42


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