Raffo, Andrea; Ohanian, Lee E. - Society for Economic Dynamics - SED - 2004
There is a large literature, including work by Hall (1997), Chari, Kehoe, and McGrattan (2002), Gali, Gertler, and Lopez-Salido (2002), and many others that has studied the gap between the household's static marginal rate of substitution condition (MRS) between consumption and leisure and the...