Michaillat, Pascal; Saez, Emmanuel - C.E.P.R. Discussion Papers - 2013
We present a static model of aggregate demand and unemployment. The economy has a nonproduced good, a produced good … prices as parameters. We obtain the following results: (1) unemployment and unsold production prevail in equilibrium; (2 …; (4) transfers from savers to spenders stimulate aggregate demand, product market tightness, and employment; (5) the …