Re: isi

Posted by aditi5000 on May 11, 2012; 10:45am
URL: http://discussion-forum.276.s1.nabble.com/isi-tp7542957p7549996.html

Fair enough, but clarify this - how can consumption be broken up into consumption of domestic and consumption of imported goods? have you ever seen a consumption function such as
 c= c0+ c1(Y) + mpm(Y) or even c= c0+ c1(Y) + M bar 

It is always c = c0+c1(Y-t) and the import function is given as net exports actually with
NEt exports = X bar - (M bar + MPM(Y))
NEt exports = X bar - M bar - MPM(Y)