Muscatelli, V. Anton; Tirelli, Patrizio; Trecroci, Carmine - Centre for Dynamic Macroeconomic Analysis, University … - 2004
This paper derives a New Keynesian dynamic general equilibrium model with liquidity constrained consumers and sticky prices. The model allows a role for both government spending and taxation in the DGE model. The model is then estimated using US data. We demonstrate that there seems to be a...