scholarly journals On global determinacy of New Keynesian models

2021 ◽  
Author(s):  
Minseong Kim
Keyword(s):  
Inflation Rate ◽  
New Keynesian ◽  
State Variables ◽  
Output Level ◽  
Effective Demand ◽  
The Past ◽  
Endogenous Variables ◽  
New Keynesian Models ◽  
Global Equilibrium

New Keynesian models assume that inflation rate and output level are endogenous variables. However, given that firms are price setters and suppliers in the models, it is more reasonable to assume that, absent equilibrium coordination (or tatonnement) issues usually abstracted away, both variables actually are state variables determined by expectations in the past. This secures global equilibrium determinacy and a previously unavailable account of inflation rate for New Keynesian models. Furthermore, the principle of effective demand is implemented via the expectation channel.

scholarly journals The Optimal Inflation Rate in New Keynesian Models

2010 ◽  
Author(s):  
Olivier Coibion ◽  
Yuriy Gorodnichenko ◽  
Johannes F. Wieland
Keyword(s):  
Inflation Rate ◽  
New Keynesian ◽  
New Keynesian Models

scholarly journals Structure and use of the medium term projection model in the National Bank of Serbia

2011 ◽  
Vol 56 (188) ◽  
pp. 32-61
Author(s):  
Mirko Djukic ◽  
Jelena Momcilovic ◽  
Ljubica Trajcev
Keyword(s):  
Inflation Targeting ◽  
Inflation Rate ◽  
New Keynesian ◽  
Price Formation ◽  
Decision Making Process ◽  
Medium Term ◽  
Projection Model ◽  
Current Form ◽  
The Past ◽  
National Bank

Medium-term projections are an important element of the decision making process in the inflation-targeting regime that the National Bank of Serbia has been implementing for the past several years. The main goal of medium-term projections is to project the policy rate path that will ensure that inflation in the coming period moves close to the targeted inflation rate. The most important tool for medium term projections is a new Keynesian macroeconomic model, which is a set of equations aiming to describe the price formation mechanism in Serbia and the transmission channel of monetary policy to prices. The model is comprised of four main behavioral equations for inflation, exchange rate, output gap, and policy rate, and of a number of side behavioral equations and identities. The model in the current form has been used since the end of 2008 and is subject to regular adjustments and improvements.

scholarly journals The Optimal Inflation Rate in New Keynesian Models

2010 ◽  
Author(s):  
Olivier Coibion ◽  
Yuriy Gorodnichenko ◽  
Johannes Wieland
Keyword(s):  
Inflation Rate ◽  
New Keynesian ◽  
New Keynesian Models

scholarly journals Asset Returns, the Business Cycle and the Labor Market

2013 ◽  
Vol 14 (3) ◽  
pp. 372-397 ◽  
Author(s):  
Burkhard Heer ◽  
Alfred Maußner
Keyword(s):  
Labor Market ◽  
Business Cycle ◽  
Equity Premium ◽  
Working Hours ◽  
New Keynesian ◽  
Monetary Shocks ◽  
Productivity Shocks ◽  
New Keynesian Models ◽  
The Business Cycle ◽  
Sticky Wages

Abstract We review the labor market implications of recent real-business cycle and New Keynesian models that successfully replicate the empirical equity premium. We document the fact that all models reviewed in this article that do not feature either sticky wages or immobile labor between two production sectors as in Boldrin et al. (2001) imply a negative correlation of working hours and output that is not observed empirically. Within the class of Neo-Keynesian models, sticky prices alone are demonstrated to be less successful than rigid nominal wages with respect to the modeling of the labor market stylized facts. In addition, monetary shocks in these models are required to be much more volatile than productivity shocks to match statistics from both the asset and labor market.

scholarly journals Movement of Inflation and New Keynesian Phillips Curve in ASEAN

Economies ◽  
2021 ◽  
Vol 9 (1) ◽  
pp. 34
Author(s):  
Adhitya Wardhono ◽  
M. Abd. Nasir ◽  
Ciplis Gema Qori’ah ◽  
Yulia Indrawati
Keyword(s):  
Inflation Rate ◽  
Phillips Curve ◽  
New Keynesian ◽  
Inflation Expectations ◽  
New Keynesian Phillips Curve ◽  
Method Of Moment ◽  
Inflation Model ◽  
Wage Inflation ◽  
Generalized Method Of Moment ◽  
Forward Looking

The development of the theory of dynamic inflation begins by linking wage inflation and unemployment. In further developments, factor of expectation is classified into inflation model. The study used inflation data is important for ASEAN, because ASEAN is one of the strengths of the international economy. This study analyzes the dynamics of inflation in the ASEAN using framework the New-Keynesian Phillips Curve (NKPC) model. The data used is the quarterly panel data from 5 ASEAN members in the period 2005.QI–2018.QIV. The study of this dynamic inflation applies quarter to quarter inflation data, meaning that the inflation rate is the percentage change in the general price of the current quarter compared to last quarter general price divided by the last quarter. The empirical results are estimated by using the Generalized Method of Moment (GMM), both of the system and first different indicates that the pattern formation of inflation expectations are backward-looking and forward-looking. In addition, the estimated NKPC models show the backward-looking behavior is more dominant than the forward looking. Changes in inflation are not entirely influenced by expectations of inflation in each country. Changes in inflation are also influenced by the output gap, changes in money supply, and exchange rate. Based on the findings of this study, it can be concluded that the NKPC models can explain the dynamics of inflation in each country in the ASEAN region.

scholarly journals The New Keynesian Synthesis

1993 ◽  
Vol 7 (1) ◽  
pp. 5-22 ◽  
Author(s):  
David Romer
Keyword(s):  
Current Understanding ◽  
New Keynesian ◽  
Price Rigidity ◽  
Rapid Progress ◽  
The Past ◽  
Nominal Rigidity

The new Keynesians made more rapid progress in understanding the microeconomics of unemployment than in understanding the microeconomics of nominal price rigidity. But the past five years have seen important breakthroughs in this second area. This paper will describe these breakthroughs, discuss our current understanding of nominal rigidity, and assess the work that remains to be done.

Effective Monetary Policy Strategies in New Keynesian Models: A Reexamination

2015 ◽  
Vol 29 (1) ◽  
pp. 289-344 ◽  
Author(s):  
Hess Chung ◽  
Edward Herbst ◽  
Michael T. Kiley
Keyword(s):  
Monetary Policy ◽  
New Keynesian ◽  
New Keynesian Models ◽  
Policy Strategies
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