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February 5, 2026Journal of risk and financial managementOpen Access

Debt Thresholds and Unemployment Nexus: A Study on Fiscal–Monetary Policy Interactions Across the EU Member States

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Authors

SASumaya Khan AuntuVPVaida Pilinkienė

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Overview

Examines fiscal and monetary policy interactions affecting unemployment in the EU, suggesting improved governance frameworks.

Key Points

  • The study aims to explore how fiscal and monetary policy interactions influence unemployment across different debt regimes in EU member states.
  • Utilized quarterly data from 2000 to 2025 across EU-27 countries.
  • Employed fixed-effects panel threshold regression model to analyze interactions.
  • Incorporated variables for budget, debt, money supply, inflation, and interest rates under various debt regimes.
  • Fiscal deficits lead to increased unemployment, reduced by 81% in high-debt regimes.
  • Monetary variables show limited effects on unemployment reduction, particularly in high-debt regimes.
  • Crisis response effectiveness depends on existing fiscal spaces, with debt regime impacting labor market outcomes.

Cite This Study

Auntu et al. (2026) studied this question.

synapsesocial.com/papers/6984358ff1d9ada3c1fb471fhttps://doi.org/10.3390/jrfm19020105
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