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inflation in order to stabilize the expectations of households, firms and innovators. Endogenous growth provides a self … debt-stabilizing inflation when current fiscal deficits are not backed by future fiscal surpluses. Because growth creates … unique stable equilibrium, provided that the policy permits r−g to fall with inflation. …
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This paper studies fiscal policy in a New Keynesian DSGE model with endogenous technology growth in which scarring can occur endogenously through hysteresis effects in TFP. Both demand- and supply-driven recessions can weaken investment in R&D and technology adoption, thus depressing the...
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A central organizing framework of the voluminous recent literature studying changes in the returns to skills and the evolution of earnings inequality is what we refer to as the canonical model, which elegantly and powerfully operationalizes the supply and demand for skills by assuming two...
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