Much teaching of intermediate macroeconomics uses the IS-LM-AS or ADAS approach. This is far removed both from the practice of interest rate setting, inflation-targeting central banks and from the models that are taught in graduate courses. Modern monetary macroeconomics is based on what is increasingly known as the 3-equation New Keynesian model: IS curve, Phillips curve and interest ratebased...

This paper examines the behaviour of inflation, output, and unemployment in Sub-Saharan Africa (SSA) countries shows that predictions Phillips curve Okun’s law are valid short run. In long run however, coefficient declines greatly turns positive while phenomenon gravitates towards New Keynesian Curve (NKPC) but with a negative relationship. The evidence echoes Friedman’s proposition temporary t...

This paper uses a New Keynesian framework to study the coordination of fiscal and monetary policies, in response to an inflation shock when the policymaker acts with commitment. We first show that, in the simplest New Keynesian model, fiscal policy plays no part in the optimal policy response, because of the comparative advantage which monetary policy has in the control of inflation. We the...