The article explores how different types of government spending affect the economy, especially the labor market, in the Euro area. It shows that the impact of fiscal policy depends on what the government spends money on, like giving money to people, investing in public projects, or cutting taxes. The study also finds that the effects of fiscal policy on unemployment are not the same as its effects on overall economic output. Additionally, the state of the economy and the actions of the central bank can influence how effective fiscal policy is. The research suggests that in a monetary union like the Euro area, fiscal policies can have spillover effects between countries and that transferring money between countries can help soften economic shocks.