Government Spending Boost Promises Steady Jobs, Curbing Consumption Volatility
The article explores how government spending can affect unemployment during economic ups and downs. The researchers compare two types of government policies and find that the optimal policy leads to higher government spending compared to a different approach. They also discover that the optimal policy can help stabilize employment, even if it means more fluctuations in consumption. Additionally, the optimal policy changes based on the type of economic shock, being either pro or countercyclical.