Optimal fiscal and monetary policy under imperfect competition
Rutgers University; University of Pennsylvania
Flexible-price production economy with imperfect competition (monopolistic competition), transaction costs for money demand, distortionary labor income taxes, and nominal non-state-contingent government debt. No capital. Government finances exo
monopolistic competition with Dixit-Stiglitz aggregation; linear production technology in labor; flexible prices
Table 2 p.202
Imperfect competition with markup=1.35, Ramsey optimal policy