A Model of Rule-of-Thumb Consumers With Nominal Price and Wage Rigidities

Borradores de Economia
Number: 
707
Published: 
Classification JEL: 
E32, E37, C68
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy
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This document presents a dynamic stochastic general equilibrium model with rule of thumb (Non-Ricardian) agents and both nominal price and wage rigidities. The model follows closely that of Galí et al. (2004) and expands it to include a second way form of