MPCs, MPEs, and Multipliers: A Trilemma for New Keynesian Models

A-Tier
Journal: Review of Economics and Statistics
Year: 2023
Volume: 105
Issue: 3
Pages: 700-712

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that New Keynesian models with frictionless labor supply face a challenge: given standard parameters, they cannot simultaneously match plausible estimates of marginal propensities to consume (MPCs), marginal propensities to earn (MPEs), and fiscal multipliers. A HANK model with sticky wages provides a solution to this trilemma.

Technical Details

RePEc Handle
repec:tpr:restat:v:105:y:2023:i:3:p:700-712
Journal Field
General
Author Count
3
Added to Database
2026-01-24