# model with nominal rigidities

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The model with nominal rigidities is:

yd = m - p + v,

ys = b(p - E[p]) +b(u - a E[u]),

w = E[p] + a E[u], a = aÃ ?/d+Ã ?. And

The model without nominal rigidities is:

yd = m - p + v,

ys = b(1-a)u,

w = p + au, a = aÃ ?/d+Ã ?.

Find P* and Y* for model with nominal rigidities?

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Hope this helps...

The model with nominal rigidities is:

yd = m - p + v,

ys = b(p - E[p]) +b(u - a E[u]),

w = E[p] + a E[u], a = aÃƒ/d+Ãƒ. And

The model without nominal rigidities is:

yd = m - p + v,

ys = b(1-a)u,

w = p + au, a = aÃƒ/d+Ãƒ.

Find P* and Y* for model with nominal rigidities?

Y* (or the equilibrium value for Y ...

#### Solution Summary

The expert finds a P* and Y* for model with nominal rigidities.

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