Based on the analysis from the position of the New Keynesian approach of the critical literature and the publications of the New Keynesians, the principal distinctions are defined between their conceptions in the field of the macroeconomic theory and those of the „Old“ Keynesians, Neo- and...

Contrasts are drawn between mainstream macroeconomics (with the 'New Consensus in Macroeconomics' taken as the current manifestation) and heterodox macroeconomics and their abilities to comprehend the financial crises and world wide recession of 2007 – 09 for macroeconomic paradigms is...

In recent decades, advanced economies have experienced low and stable inflation and long periods of liquidity trap. We construct an alternative business-cycle model capturing these two features by adding two assumptions to a money-in-the-utility-function model: the labor market is subject to...

Robert Solow has criticized our 2006 Journal of Economic Perspectives essay describing "Modern Macroeconomics in Practice." Solow eloquently voices the commonly heard complaint that too much macroeconomic work today starts with a model with a single type of agent. We argue that modern...

The non-linear approach to economic dynamics enables us to study traditional economic models using modified formulations and different methods of solution. In this article we compare dynamical properties of Keynesian and Classical macroeconomic models. We start with an extended dynamical IS-LM...

This paper studies the joint behaviour of inflation and unemployment in Spain over the period 1964–95 in order to estimate dynamic Phillips trade-offs and sacrifice ratios in response to a demand shock. We organize our empirical approach as a structural (albeit eclectic) one. In so doing, we...

Two key issues are examined in an integrated framework: the emergence of global imbalances and the precautionary motive for accumulating reserves. Standard models of general equilibrium would predict modest current account surpluses in the emerging markets if they face higher risk than the US...

The purpose of the paper is to highlight the key characteristics of the Fiscal Theory for the Cost Level (FTCL) and to compare them to the postulates of the monetarism. Comparative analysis confirms the thesis that only the versions of this theory in which the trajectory of the cost level...

We do not have a good measure of the effects of fiscal policy in a recession because the methods that we use to estimate the effects of fiscal policy—both those using the observed outcomes following different policies in aggregate data and those studying counterfactuals in fitted model...

The paper subjects seven structural DSGE models, all used heavily by policymaking institutions, to discretionary fiscal stimulus shocks using seven different fiscal instruments, and compares the results to those of two prominent academic DSGE models. There is considerable agreement across models...