01815cas a2200265 a 4500 AALejournalIMF013317 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475595338 1018-5941 BD-DhAAL BD-DhAAL Cantore, Cristiano. A Fiscal Stimulus and Jobless Recovery / Cristiano Cantore, Paul Levine, Giovanni Melina. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (53 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We analyse the effects of a government spending expansion in a DSGE model with Mortensen-Pissarides labour market frictions, deep habits in private and public consumption, investment adjustment costs, a constant-elasticity-of-substitution (CES) production function, and adjustments in employment both at the intensive as well as the extensive margin. The combination of deep habits and CES technology is crucial. The presence of deep habits magnifies the responses of macroeconomic variables to a fiscal stimulus, while an elasticity of substitution between capital and labour in the range of available estimates allows the model to produce a scenario compatible with the observed jobless recovery. Mode of access: Internet Levine, Paul. Melina, Giovanni. IMF Working Papers; Working Paper ; No. 2013/017 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/017/001.2013.issue-017-en.xml IMF e-Library