1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Do Structural Policies Affect Macroeconomic Stability?

Using a panel of OECD countries, this study assesses the linkages between structural policies and macroeconomic stability. Business cycle and time-series characteristics of GDP and its components are employed to define various measures for economic instability and for the persistence of adverse shocks. The results suggest that some growth-enhancing policies such as lowering employment protection also reduce macroeconomic fluctuations, while others may generate trade-offs between growth and stability. A pro-cyclical tax structure seems to help alleviating the persistence of adverse macroeconomic shocks.

English

Keywords: macroeconomic stability, structural policies, business cycles
JEL: F41: International Economics / Macroeconomic Aspects of International Trade and Finance / Open Economy Macroeconomics; J51: Labor and Demographic Economics / Labor-Management Relations, Trade Unions, and Collective Bargaining / Trade Unions: Objectives, Structure, and Effects; E61: Macroeconomics and Monetary Economics / Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook / Policy Objectives; Policy Designs and Consistency; Policy Coordination; G38: Financial Economics / Corporate Finance and Governance / Corporate Finance and Governance: Government Policy and Regulation; H21: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Efficiency; Optimal Taxation; E32: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Business Fluctuations; Cycles; L51: Industrial Organization / Regulation and Industrial Policy / Economics of Regulation; I31: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / General Welfare; Well-Being; J68: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Mobility, Unemployment, and Vacancies: Public Policy
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