When taxes are included in the stylized DSGE model, with Cobb-Douglas production, labor demand is given by $w = ( 1 - \tau ) \cdot M P L$
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Question

When taxes are included in the stylized DSGE model, with Cobb-Douglas production, labor demand is given by $w = ( 1 - \tau ) \cdot M P L$ 
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Quizplus · Accepted Answer

In a DSGE model with Cobb-Douglas production, labor demand is derived from the marginal product of labor (MPL). When taxes are included, the after-tax wage $w$ is equal to the MPL adjusted for the tax rate $(1 - \tau)$, where $\tau$ is the tax rate.

When Taxes Are Included in the Stylized DSGE Model, with Cobb-Douglas