New Keynesian Roots
نویسنده
چکیده
The stability properties of a macromodel are determined by its characteristic roots. Conventional price level determinacy is achieved by imposing restrictions on policy rules so that the characteristic roots satisfy a saddlepath criterion. This paper shows how to choose arbitrary roots for the canonical New Keynesian macromodel using a simple forward-looking Taylor-type policy rule. We are able to show the implications of discretionary and bubble-free policies for the characteristic roots of the model. Our approach sheds considerable light on the so-called Cochrane Critique, where the saddlepath criterion is insu¢ cient to rule out indeterminacy. JEL classi cations: C62; E52; E61
منابع مشابه
New Keynesian economics: Between equilibrium and disequilibrium
In an attempt to explain and forecast the behavior of economic variables and of the economy as a whole, each school of economics creates its own system of paradigms, premises and models. The New Keynesian school of thought developed from the traditional Keynesian insights tries to offer additional explanations, based on microeconomic foundations, for such phenomena as economy-wide fluctuations ...
متن کاملEvaluation of Monetary and Fiscal Policy Based on New Keynesian Dynamic General Equilibrium Model in Iran’s Economy
This paper examines monetary and fiscal policy through the estimation of a New-Keynesian dynamic general equilibrium model for Iran’s economy. In this New-Keynesian dynamic general equilibrium model, the consumers encounter the liquidity constraint and the firms face sticky prices, while they are changing them. In the model presented, a role is considered for both government spending and taxati...
متن کاملمقایسه منحنی فیلیپس کینزگرایان جدید با الگوهای سری زمانی در پیشبینی تورم
The harmful effects of chronic high inflation in the economy led the governments and country’s monetary authorities seek to reduce or eliminate this phenomenon. Therefore it’s very important to predict how inflation moves providing an appropriate economic model is a crucial factor to forecast inflation, so on. In this regard, in the present research, we attempt to generate a appropriate model f...
متن کاملKeynes in Nutshell: A New Monetarist Approach (Incomplete)
A Farmer-type Keynesian model is constructed to explore and exposit Keynesian ideas. The modeling innovation is to integrate Farmer’s approach with monetary exchange and to derive optimal monetary and fiscal policies. Two approaches are taken to optimal policy an approach in the spirit of New Keynesian sticky-wage-and-price models, and an a "sophisticated policy" approach. Optimal policies typi...
متن کاملKeynesian, Old Keynesian, and New Keynesian Wage Nominalism
Wage nominalism has long been a puzzle for economists. The original Keynesian explanation related it to a coordination failure in the context of decentralized union bargaining, a problem now in a largely nonunion U. S. labor market. Moreover, Keynesianism assumed wage nominalism as the norm rather than explaining it. New Keynesian explanations, based on implicit contracts, menu costs, and other...
متن کامل