Petrella, Ivan; Rossi, Raffaele; Santoro, Emiliano - Økonomisk Institut, Københavns Universitet - 2012
We study the normative implications of a New Keynesian model featuring intersectoral trade of intermediate goods between two sectors that produce durables and non-durables. The interplay between durability and sectoral production linkages fundamentally alters the intersectoral stabilization...