Natural Output with 4 production factors Cobb Douglas in Calvo Fully Flexible Prices


#1

Hi everyone,

Someone knows a possible equation of Natural Output according to Jordi Gali textbook “Monetary Policy, Inflation, and the Business Cycle (pp.48)” but with a Cobb-Douglas with 4 production factors Y=A,L^z1,K1^z2,K2^z3,K3^z4 in a fully flexible prices scenario (Calvo Prices)??

Thank You.


#2

There is no general answer to this question as it will depend on the other assumptions made in the model like preferences and factor mobility. You will have to derive the equation yourself.