Does our baseline model without search produce a multiplier, Ask an Expert

Economics

Does our baseline model without search produce a multiplier? What assumptions must be made in the model with search to make the mul- tiplier match the larger estimates in the data. [Our model can match the lower estimates without considering search] What types of changes to our current model would make the multiplier bigger? If we consider output today (as opposed to tomorrow) the output we want to increase (by either increasing gov’t spending or issuing tax cuts) how would the addition of binding borrowing constraints increase the multiplier?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92197080

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