INVENTORIES IN THE KEYNESIAN MACRO MODEL

The New Keynesian Model

Technical Note on the Keynesian Model

In class, I focus on explaining the Keynesian model in words and with diagrams. I don’t walk through the underlying math, mainly because most students find diagrams easier to follow. However, going through the math at least once – at your own pace – will help you better understand the diagrams and how to use them correctly; and some students may find the math easier than the diagrams, or useful...

The Effect of Zakat on Consumption Stability in the Iranian Economy in the form of the New Keynesian DSGE Model

Household Consumption Decisions Have a Significant Impact on The Behavior of Macroeconomic Variables in The Short and Long Run. One of The Factors Affecting the Consumption of Households in an Islamic Society Is Zakat, Which Is Established in Islam to Combat Poverty and Acts as a Tool to Redistribute Income and Wealth from The Rich to The Poor and Plays an Important Role In Ensuring Justice and...

A Behavioral New Keynesian Model

This paper presents a framework for analyzing how bounded rationality a↵ects monetary and fiscal policy. The model is a tractable and parsimonious enrichment of the widely-used New Keynesian model – with one main new parameter, which quantifies how poorly agents understand future policy and its impact. That myopia parameter, in turn, a↵ects the power of monetary and fiscal policy in a microfoun...

Intermediate Macroeconomics: New Keynesian Model

Among mainstream academic economists and policymakers, the leading alternative to the real business cycle theory is the New Keynesian model. Whereas the real business cycle model features monetary neutrality and emphasizes that there should be no active stabilization policy by governments, the New Keynesian model builds in a friction that generates monetary non-neutrality and gives rise to a we...