Cúrdia, Vasco (contributor); Woodford, Michael (contributor) - 2008
the output gap | that
characterizes optimal policy in the basic NK model continues to provide a good
approximation to … model, as in the basic
New Keynesian model, all output is consumed either by households or by the gov-
ernment;13 hence … depends
on expected long-run output, just as in the basic NK model (see, e.g., Woodford, 2003, chap. 4).
The expected long …