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A Fiscal Stimulus and Jobless Recovery

Cantore, C, Melina, G and Levine, P (2014) A Fiscal Stimulus and Jobless Recovery Scandinavian Journal of Economics, 116 (3). pp. 669-701.

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Abstract

We analyze the effects of a government-spending expansion in a dynamic stochastic general equilibrium model with Mortensen–Pissarides labor-market frictions, deep habits in private and public consumption, investment adjustment costs, a constant elasticity of substitution (CES) production function, and adjustments in employment at both intensive and extensive margins. The combination of deep habits and CES technology is crucial. The presence of deep habits magnifies the responses of macroeconomic variables to a fiscal stimulus, while an elasticity of substitution between capital and labor in the range of available estimates allows the model to produce a scenario compatible with the observed jobless recovery.

Item Type: Article
Authors :
NameEmailORCID
Cantore, Cc.cantore@surrey.ac.ukUNSPECIFIED
Melina, GUNSPECIFIEDUNSPECIFIED
Levine, PUNSPECIFIEDUNSPECIFIED
Date : 1 July 2014
Identification Number : 10.1111/sjoe.12066
Related URLs :
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:31
Last Modified : 17 May 2017 14:36
URI: http://epubs.surrey.ac.uk/id/eprint/820211

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