scholarly journals Resurrecting the New-Keynesian Model: (Un)Conventional Policy and the Taylor Rule

2018 ◽  
Author(s):  
Olaf Posch
Keyword(s):  
Taylor Rule ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Keynesian Model

scholarly journals MONETARY POLICY, INFLATION AND UNEMPLOYMENT: IN DEFENSE OF THE FEDERAL RESERVE

2012 ◽  
Vol 17 (6) ◽  
pp. 1311-1329 ◽  
Author(s):  
Nicolas Groshenny
Keyword(s):  
Monetary Policy ◽  
Federal Reserve ◽  
Inflation Rate ◽  
Taylor Rule ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Keynesian Model ◽  
Sustainable Employment ◽  
Sizeable Increase ◽  
Low Rate

To what extent did deviations from the Taylor rule between 2002 and 2006 help to promote price stability and maximum sustainable employment? To address that question, I estimate a New Keynesian model with unemployment and perform a counterfactual experiment where monetary policy strictly follows a Taylor rule over the period 2002:Q1–2006:Q4. I find that such a policy would have generated a sizeable increase in unemployment and resulted in an undesirably low rate of inflation. Around mid-2004, when the counterfactual deviates the most from the actual series, the model indicates that the probability of an unemployment rate greater than 8% would have been as high as 80%, whereas the probability of an inflation rate above 1% would have been close to zero.

scholarly journals STRUCTURAL STABILITY OF THE GENERALIZED TAYLOR RULE

2017 ◽  
Vol 23 (4) ◽  
pp. 1664-1678
Author(s):  
William A. Barnett ◽  
Evgeniya A. Duzhak
Keyword(s):  
Regime Switching ◽  
Taylor Rule ◽  
Period Doubling ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Policy Regime ◽  
Keynesian Model ◽  
Small Change ◽  
Monetary Models ◽  
Active Policy

This paper analyzes the dynamical properties of monetary models with regime switching. We start with the analysis of the evolution of inflation when policy is guided by a simple monetary rule where coefficients switch with the policy regime. We rule out the possibility of a Hopf bifurcation and demonstrate the possibility of a period-doubling bifurcation. As a result, a small change in the parameters (e.g., a more active policy response) can lead to a drastic change in the path of inflation. We show that the New Keynesian model with a current-looking Taylor rule is not prone to bifurcations. A New Keynesian model with a hybrid rule, however, exhibits the same pattern of period-doubling bifurcations as the analysis with a simple monetary rule.

scholarly journals Tight Money-Tight Credit: Coordination Failure in the Conduct of Monetary and Financial Policies

2021 ◽  
Vol 13 (3) ◽  
pp. 37-73
Author(s):  
Julio A. Carrillo ◽  
Enrique G. Mendoza ◽  
Victoria Nuguer ◽  
Jessica Roldán-Peña
Keyword(s):  
Taylor Rule ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Coordination Failure ◽  
Financial Policies ◽  
Income Effects ◽  
Keynesian Model ◽  
Costly Monitoring ◽  
Efficiency Losses ◽  
Stabilization Policies

Violations of Tinbergen’s rule and strategic interaction undermine stabilization policies in a New Keynesian model with the Bernanke-Gertler accelerator. Welfare costs of risk shocks are large because of efficiency losses and income effects of costly monitoring, but they are much larger under a simple Taylor rule (STR) or a Taylor rule augmented with credit spreads (ATR) than with a Taylor rule and a separate financial rule targeting spreads. ATR and STR are tight money-tight credit regimes responding too much (little) to inflation (spreads). The Nash equilibrium of monetary and financial policies is also tight money-tight credit but it dominates ATR and STR. (JEL E12, E31, E44, E43, E52, E63)

Misperceptions and Monetary Policy in a New Keynesian Model

2005 ◽  
Author(s):  
Jarkko P. P. Jääskelä ◽  
Jack McKeown
Keyword(s):  
Monetary Policy ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Keynesian Model

scholarly journals A new Keynesian model with unemployment: The effect of on‐the‐job search

2021 ◽  
Author(s):  
Zeynep Kantur ◽  
Kerim Keskin
Keyword(s):  
Job Search ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Keynesian Model

scholarly journals Optimal control in the New Keynesian model with monetary and fiscal policy interactions

2021 ◽  
Vol 1864 (1) ◽  
pp. 012040
Author(s):  
T A Alexeeva ◽  
N V Kuznetsov ◽  
T N Mokaev ◽  
I A Polshchikova
Keyword(s):  
Optimal Control ◽  
Fiscal Policy ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Policy Interactions ◽  
Keynesian Model ◽  
Monetary And Fiscal Policy

scholarly journals Public Debt and Changing Inflation Targets

2016 ◽  
Vol 8 (4) ◽  
pp. 142-176 ◽  
Author(s):  
Michael U. Krause ◽  
Stéphane Moyen
Keyword(s):  
Central Bank ◽  
Public Debt ◽  
Pronounced Effect ◽  
New Keynesian ◽  
Moderate Increase ◽  
New Keynesian Model ◽  
Inflation Target ◽  
Keynesian Model ◽  
Maturity Structure ◽  
Inflation Targets

What are the effects of a higher central bank inflation target on the burden of real public debt? Several recent proposals have suggested that even a moderate increase in the inflation target can have a pronounced effect on real public debt. We consider this question in a New Keynesian model with a maturity structure of public debt and an imperfectly observed inflation target. We find that moderate changes in the inflation target only have significant effects on real public debt if they are essentially permanent. Moreover, the additional benefits of not communicating a change in the inflation target are minor. (JEL E12, E31, E52, H63)

scholarly journals An estimated New-Keynesian model with unemployment as excess supply of labor

2014 ◽  
Vol 40 ◽  
pp. 338-359 ◽  
Author(s):  
Miguel Casares ◽  
Antonio Moreno ◽  
Jesús Vázquez
Keyword(s):  
New Keynesian ◽  
New Keynesian Model ◽  
Excess Supply ◽  
Keynesian Model

scholarly journals Unemployment in an Estimated New Keynesian Model

2012 ◽  
Author(s):  
Jordi Galí ◽  
Frank Smets ◽  
Rafael Wouters
Keyword(s):  
New Keynesian ◽  
New Keynesian Model ◽  
Keynesian Model
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