Poole in the New Keynesian model

The New Keynesian Model

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...

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 New Keynesian Model with Heterogeneous Expectations

This paper introduces heterogeneous expectations into a New Keynesian model. Our primary theoretical contribution is to provide an aggregation result for a model with nominal rigidities and heterogeneous bounded rationality. We incorporate bounded rationality at the individual agent level and determine restrictions on expectations operators sufficient to imply aggregate IS and AS relations of t...