Optimal monetary policy in a new Keynesian model with job search
Department of Economics, National Tsing-Hua University, Hsin-Chu 30013, Taiwan
New Keynesian DSGE model with Mortensen-Pissarides job search and matching frictions, Nash wage bargaining, CES matching function, and Calvo price stickiness. Extended model includes endogenous capital accumulation with adjustment costs and var
intermediate goods producers: use labor with search frictions; retailers: monopolistic competition with Calvo pricing; final goods producers: perfect competition with CES aggregation
Table 4 Panel E
Optimal policy with higher elasticity of substitution in matching e=0.8, benchmark model