Asada, Toichiro; Chen, Pu; Chiarella, Carl; Flaschel, Peter - Finance Discipline Group, Business School - 2004
We reformulate and extend the standard AS-AD growth model of the Neoclassical Synthesis (stage I) with its traditional microfoundations. The model retains an LM curve in the place of a Taylor interest rate rule, exhibits sticky wages as well as sticky prices, myopic perfect foresight of current...