scholarly journals New Keynesian Models: Not Yet Useful for Policy Analysis

2008 ◽  
Author(s):  
V.V. Chari ◽  
Patrick Kehoe ◽  
Ellen McGrattan
Keyword(s):  
Policy Analysis ◽  
New Keynesian ◽  
New Keynesian Models

scholarly journals New Keynesian Models: Not Yet Useful for Policy Analysis

2008 ◽  
Author(s):  
V. V. Chari ◽  
Patrick J. Kehoe ◽  
Ellen R. McGrattan
Keyword(s):  
Policy Analysis ◽  
New Keynesian ◽  
New Keynesian Models

scholarly journals New Keynesian Models: Not Yet Useful for Policy Analysis

2009 ◽  
Vol 1 (1) ◽  
pp. 242-266 ◽  
Author(s):  
V. V Chari ◽  
Patrick J Kehoe ◽  
Ellen R McGrattan
Keyword(s):  
Policy Analysis ◽  
Structural Model ◽  
State Of The Art ◽  
Policy Advice ◽  
The State ◽  
New Keynesian ◽  
Reduced Form ◽  
Model Design ◽  
New Keynesian Models ◽  
Method Model

Macroeconomists have largely converged on method, model design, reduced-form shocks, and principles of policy advice. Our main disagreements today are about implementing the methodology. Some think New Keynesian models are ready to be used for quarter-to-quarter quantitative policy advice. We do not. Focusing on the state-of-the-art version of these models, we argue that some of its shocks and other features are not structural or consistent with microeconomic evidence. Since an accurate structural model is essential to reliably evaluate the effects of policies, we conclude that New Keynesian models are not yet useful for policy analysis. (JEL E12, E60)

scholarly journals New Keynesian Models: Not Yet Useful for Policy Analysis

2008 ◽  
Author(s):  
V. V. Chari ◽  
Patrick J. Kehoe ◽  
Ellen R. McGrattan
Keyword(s):  
Policy Analysis ◽  
New Keynesian ◽  
New Keynesian Models

scholarly journals Asset Returns, the Business Cycle and the Labor Market

2013 ◽  
Vol 14 (3) ◽  
pp. 372-397 ◽  
Author(s):  
Burkhard Heer ◽  
Alfred Maußner
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Equity Premium ◽  
Working Hours ◽  
New Keynesian ◽  
Monetary Shocks ◽  
Productivity Shocks ◽  
New Keynesian Models ◽  
The Business Cycle ◽  
Sticky Wages

Abstract We review the labor market implications of recent real-business cycle and New Keynesian models that successfully replicate the empirical equity premium. We document the fact that all models reviewed in this article that do not feature either sticky wages or immobile labor between two production sectors as in Boldrin et al. (2001) imply a negative correlation of working hours and output that is not observed empirically. Within the class of Neo-Keynesian models, sticky prices alone are demonstrated to be less successful than rigid nominal wages with respect to the modeling of the labor market stylized facts. In addition, monetary shocks in these models are required to be much more volatile than productivity shocks to match statistics from both the asset and labor market.

Effective Monetary Policy Strategies in New Keynesian Models: A Reexamination

2015 ◽  
Vol 29 (1) ◽  
pp. 289-344 ◽  
Author(s):  
Hess Chung ◽  
Edward Herbst ◽  
Michael T. Kiley
Keyword(s):  
Monetary Policy ◽  
New Keynesian ◽  
New Keynesian Models ◽  
Policy Strategies

scholarly journals Inflation in the Great Recession and New Keynesian Models

2014 ◽  
Author(s):  
Marco Del Negro ◽  
Marc Giannoni ◽  
Frank Schorfheide
Keyword(s):  
Great Recession ◽  
New Keynesian ◽  
The Great Recession ◽  
New Keynesian Models

MPCs, MPEs, and Multipliers: A Trilemma for New Keynesian Models

2021 ◽  
pp. 1-41
Author(s):  
Adrien Auclert ◽  
Bence Bardóczy ◽  
Matthew Rognlie
Keyword(s):  
Labor Supply ◽  
New Keynesian ◽  
Fiscal Multipliers ◽  
New Keynesian Models ◽  
Sticky Wages

Abstract We show that New Keynesian models with frictionless labor supply face a challenge: given standard parameters, they cannot simultaneously match plausible estimates of marginal propensities to consume (MPCs), marginal propensities to earn (MPEs), and fiscal multipliers. A HANK model with sticky wages provides a solution to this trilemma.

scholarly journals REAL RIGIDITIES AND OPTIMAL STABILIZATION AT THE ZERO LOWER BOUND IN NEW KEYNESIAN ECONOMIES

2017 ◽  
Vol 23 (4) ◽  
pp. 1371-1400 ◽  
Author(s):  
Adiya Belgibayeva ◽  
Michal Horvath
Keyword(s):  
Lower Bound ◽  
Interest Rates ◽  
Optimal Policy ◽  
New Keynesian ◽  
Zero Lower Bound ◽  
Wage Setting ◽  
Optimal Stabilization ◽  
Labor Market Segmentation ◽  
Policy Responses ◽  
New Keynesian Models

The paper revisits the literature on real rigidities in New Keynesian models in the context of an economy at the zero lower bound. It identifies strategic interaction among price- and wage-setting agents in the economy as an important determinant of both optimal policy and economic dynamics in deep recessions. In particular, labor market segmentation is shown to have a significant influence on the length of the forward commitment to keep interest rates at zero, the magnitude of the fiscal policy responses as well as inflation volatility in the economy under optimal policy.

Sign in / Sign up

Export Citation Format

Share Document