Unformatted text preview: R increases, Md decreases
Prof. Faig (Department of Economics UTM) Monetary Intertemporal Model 2013/Jan 3/7 Representative Firm Demands labour: N d depends on w () Demands goods for investment: I d depends on r ()
Produces goods and sells them. Prof. Faig (Department of Economics UTM) Monetary Intertemporal Model 2013/Jan 4/7 Government Provides public good: G (exogenous)
Supplies money: M s = M (exogenous)
Finances public good using:
issuing new money Government budget constraint: PG = PT + B 1 + R B + M M Prof. Faig (Department of Economic...
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