The purpose of this paper is to clarify the difference between the mainstream and Keynesian understandings of uncertainty which persists in spite of superficial similarities. It is argued that the difference stems from the mainstream habit of thinking in terms of a full-information benchmark, where uncertainty arises from incomplete information. Degrees of uncertainty (or ambiguity) refer to th...

The study of the Keynesian-monetarist synthesis macroeconomic model on Indonesia’s balance payments combines goods market and money approaches to theory. This used three models shortness payments: Keynesian, monetarism, Keynesian monetarism methods. Data was from 1998 2019 International Monetary Fund, international financial statistics, sheet book Bank Indonesia statistics report. data is analy...

An Austrian interpretation of the New Keynesian small menu cost model of the business cycle is proposed. Austrian and New Keynesian business cycle theories share the feature that the cycle is generated by rigidities which prevent the economy from adapting instantaneously to changing conditions. Austrian business cycle theory is capital-based, focusing on credit expansion which artificially lowe...

The conflict between modern neoclassical and traditional Keynesian theories of the business cycle centers upon the pricing mechanism.' In neoclassical models, prices are fully flexible. They represent the continuous optimization of economic agents and the continuous intersection of supply and demand. In Keynesian models, prices are often assumed to be sticky. They do not necessarily equilibrate...

Methods of empirical economic analysis have undergone enormous changes in recent decades. The availability of improved statistics and of high-speed computers have facilitated this process, but the increasing ambition and complexity of economic policy itself have perhaps been the major stimuli. In most of the economically advanced countries and, increasingly, in developing countries also, analys...

At the risk of some oversimplification, the leading alternatives to the neoclassical / real business cycle model for understanding short run fluctuations are Keynesian models. I phrase this in the plural because there are multiple different versions of the Keynesian model, which differ in terms of how the aggregate supply block of the economy is formulated. Whereas neoclassical models emphasize...

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...

The marriage of micro-founded dynamic stochastic general equilibrium models and nominal rigidities has opened up new possibilities for policy analysis, and in particular for conducting welfare-based analysis using estimated macro models. Andy Levin, Alexsei Onatski, John Williams, and Noah Williams (henceforth LOWW) have exploited these possibilities in an excellent paper, one in which they acc...

The aim of this paper is to give an account of the unfolding of macroeconomics from Keynes to the present day. To this end, I use a grid of analysis resulting from the combination of two distinctions. The first is the Marshall-Walras divide, the second is the distinction between the Keynesian conceptual apparatus and the Keynesian policy cause. On the basis of these distinctions, I construct tw...