Suppose in the New Keynesian open-economy model, that there is a positive output gap. There is also

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Suppose in the New Keynesian open-economy model, that there is a positive output gap. There is also a liquidity trap at the world level, in that r* = 0. Is there anything that economic policy can do to close the output gap? If so, what? Explain.

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Macroeconomics

ISBN: 978-0132991339

5th edition

Authors: Stephen d. Williamson

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Question Posted: Dec 05, 2014 09:59 AM

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Suppose in the New Keynesian open-economy model, that there is a positive output gap. There is also

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Whether we have the liquidity trap case with r0 or the case we have consider...View the full answer

Macroeconomics

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