Optimal factor and production subsidies under classical unemployment

This paper appraises and compares the macroeconomic effects of three supply-side policies - namely employment, investment and production subsidies - within the context of a multisectoral two-period model of a small open economy with classical unemployment. Optimal subsidy levels are studied, a hierarchy of policies is derived, and policy rankings are shown to survive the introduction of common alternative specifications of the social welfare function.

A hard copy is available in UCD Library at GEN 330.08 IR/UNI