Online Appendix for ‘ Investment Hangover and the Great Recession ’
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چکیده
APPROXIMATION OF THE KEYNESIAN MULTIPLIER EMBEDDED IN GHH PREFERENCES. — In a model with GHH preferences, the labor wedge determines the local output multiplier with respect to demand shocks. This result was obtained by Auclert and Rognlie (2017), and in this appendix it is restated in the context of the current paper. To see why the labor wedge is important, note that holding rt+1 (controlled by monetary policy) and ct+1 (tomorrow’s net consumption) constant, ct is uniquely pinned down by the Euler equation in (24). Now, equating production to demand, and writing xt ≡ kt+1 − (1− δ)kt + i t for non-consumption demand, we have
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