Keynesian theory and policy

Optimal Monetary Policy: a New Keynesian View

As Paul Samuelson once put it: Adam Smith is dead and Keynes is dead; well— and Mises is dead, too. But Keynesianism is alive and well and back with a vengeance. Built on solid neoclassical foundations, this “new” Keynesianism, which features the effects of nominal rigidities in the presence of economic shocks and the existence of involuntary unemployment, represents the theoretical core of mod...

Keynesian, Non-keynesian or No Effects of Fiscal Policy Changes? the Emu Case

This paper studies the experiences with fiscal adjustments in the European Union (EU) countries during the transition period to the Economic and Monetary Union (EMU). Using several approaches suggested in the literature on fiscal adjustments and their macroeconomic effects and in the literature on EMU, we analyze the effects of the fiscal adjustments during this period on private consumption. T...

Econometrics, Realism and Policy in Post Keynesian Economics

Environmental policy and macroeconomic dynamics in a new Keynesian model

This paper studies the dynamic behavior of an economy under different environmental policy regimes in a New Keynesian model with nominal and real uncertainty. We find the following results: (i) an emissions cap policy is likely to dampen macroeconomic fluctuations; (ii) staggered price adjustment alters significantly the performance of the environmental policy regime put in place; (iii) the opt...

Monetary policy regimes and inflation in the new-Keynesian model

This paper shows that plausible modifications to the Taylor rule for monetary policy can help explain several empirical anomalies to the behavior of inflation in the new-Keynesian general equilibrium model. The key anomalies considered are (1) the persistence of inflation, both in reduced form and after conditioning on inflation’s driving processes, (2) the positive correlation between the outp...