Yet, experience to date has clearly  10  The behaviour of the public sector can, for instance, make social partners more aware of the trade-off between higher salaries and job creation. Furthermore, population ageing in most industrialised economies – and a significant increase in the old-age dependency ratio and higher healthcare and long-term care expenditures will exert growing pressure on public finances.
The notion behind countercyclical policy is simply that government should step up job creation in the public service, and increase income subsidies, in order to compensate for job losses and declining purchasing power in the private sector.