An economical business-cycle model
نویسندگان
چکیده
Abstract This article develops a new model of business cycles. The is economical in that it solved with an aggregate demand–aggregate supply diagram, and the effects shocks policies are obtained by comparative statics. builds on two unconventional assumptions. First, producers consumers meet through matching function. Thus, features unemployment, which fluctuates response to demand shocks. Secondly, wealth enters utility function, so allows for permanent zero-lower-bound episodes. In model, optimal monetary policy set interest rate at level eliminates unemployment gap. computed from prevailing gap multiplier (the effect nominal rate). If exceedingly large, cannot eliminate before reaching zero lower bound, but tax can.
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ژورنال
عنوان ژورنال: Oxford Economic Papers-new Series
سال: 2021
ISSN: ['0030-7653', '1464-3812']
DOI: https://doi.org/10.1093/oep/gpab021