Purchase Solution

model with nominal rigidities

Not what you're looking for?

Ask Custom Question

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 = aà?/d+à?. And

The model without nominal rigidities is:
yd = m - p + v,
ys = b(1-a)u,
w = p + au, a = aà?/d+à?.

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

Purchase this Solution

Solution Summary

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

Solution Preview

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 = 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?

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

Purchase this Solution


Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.