Rossi, Raffaele - Department of Economics, Adam Smith Business School - 2007
¤erently from the usual Leeper (1991) result, the determinacy condition requires for both monetary and fiscal policy to be either … the introduction of a distortive fiscal policy and independently of the parametrization used, private consumption responds …This paper analyzes a New Keynesian model with Rule-of-Thumb consumers (ROTC) as in Galí et al.(2007) and a fiscal …