Cantore, Cristiano; Levine, Paul; Melina, Giovanni - School of Economics, University of Surrey - 2011
We analyse the effects of a government spending expansion in a dynamic stochastic general equilibrium (DSGE) model with Mortensen-Pissarides labour market frictions, deep habits and a constant-elasticity-of-substitution (CES) production function. The combination of deep habits and CES technology...