Y = C (Y-(T(Y)) + I (i) + G + NX(Y)
It uses one interest rate to represent the entire curve? If it does that, then G is a function of i also, as is NX.
Or is i is meant to be short term rates, then what about home mortgages? What about exporting short term consumer surpluses?
Otherwise, this equation must assume the curve is at perfect equilibrium such that term rates are independent. If that is the case, then all it says is that the consumer will put money in savings when monthly money is surplus.
The equation is useless.
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