The Effects of Fiscal Policies in a General Equilibrium Model with Nominal Wage Contracts
E. CardiaEconomics Letters (1995) vol. 49: 69-75.
This paper examines the quantitative effects of fiscal policy in a general equilibrium model modified
to include nominal wage contracts. We show that the presence of even small amounts of nominal
rigidities substantially increases the effects of fiscal policies on output.
to include nominal wage contracts. We show that the presence of even small amounts of nominal
rigidities substantially increases the effects of fiscal policies on output.