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

Adrien Auclert, Bence Bardóczy and Matthew Rognlie
Additional contact information
Bence Bardóczy: Northwestern University

The Review of Economics and Statistics, 2023, vol. 105, issue 3, 700-712

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.

Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://doi.org/10.1162/rest_a_01072
Access to PDF is restricted to subscribers.

Related works:
Working Paper: MPCs, MPEs and Multipliers: A Trilemma for New Keynesian Models (2020)
Working Paper: MPCs, MPEs and Multipliers: A Trilemma for New Keynesian Models (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:restat:v:105:y:2023:i:3:p:700-712

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().