MPCs, MPEs, and Multipliers: A Trilemma for New Keynesian Models-Reference-Cited by-同舟云学术

MPCs, MPEs, and Multipliers: A Trilemma for New Keynesian Models

Published:2021-07-09 Issue: Volume: Page:1-41
ISSN:0034-6535
Container-title:The Review of Economics and Statistics
language:en
Short-container-title:

Author:

Auclert Adrien¹,Bardóczy Bence²,Rognlie Matthew³

Affiliation:

1. Stanford University, CEPR and NBER aauclert@stanford.edu

2. Northwestern University bardoczy@u.northwestern.edu

3. Northwestern University and NBER matthew.rognlie@northwestern.edu

Abstract

Abstract We show that New Keynesian models with frictionless labor supply face a challenge: given standard parameters, they cannot simultaneously match plausible estimates of marginal propensities to consume (MPCs), marginal propensities to earn (MPEs), and fiscal multipliers. A HANK model with sticky wages provides a solution to this trilemma.

Publisher

MIT Press - Journals

Subject

Economics and Econometrics,Social Sciences (miscellaneous)

Link

http://direct.mit.edu/rest/article-pdf/doi/10.1162/rest_a_01072/1928938/rest_a_01072.pdf

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