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Farmer, Roger - 2018

Keynesian economics with Walrasian general equilibrium theory from that which is widely accepted today by most neo …

Persistent link: https://www.econbiz.de/10012453218

Auclert, Adrien - 2018

We demonstrate the importance of intertemporal marginal propensities to consume (iMPCs) in disciplining general equilibrium models with heterogeneous agents and nominal rigidities. In a benchmark case, the dynamic response of output to a change in the path of government spending or taxes is...

Persistent link: https://www.econbiz.de/10012480673

Allocative and Remitted Wages : New Facts and Challenges for Keynesian Models

Basu, Susanto - 2016

Modern monetary business-cycle models rely heavily on price and wage rigidity. While there is substantial evidence that prices do not adjust frequently, there is much less evidence on whether wage rigidity is an important feature of real world labor markets. While real average hourly earnings...

Persistent link: https://www.econbiz.de/10012456396

Liquidity Trap and Excessive Leverage

Korinek, Anton - 2014

We investigate the role of macroprudential policies in mitigating liquidity traps driven by deleveraging, using a simple Keynesian model. When constrained agents engage in deleveraging, the interest rate needs to fall to induce unconstrained agents to pick up the decline in aggregate demand....

Persistent link: https://www.econbiz.de/10012458694

Uncertainty and Sentiment-Driven Equilibria

Benhabib, Jess - 2013

We construct a model to capture the Keynesian idea that production and employment decisions are based on expectations of aggregate demand driven by sentiments, and that realized demand follows from the production and employment decisions of firms. We cast the Keynesian idea into a simple model...

Persistent link: https://www.econbiz.de/10012459783

An Exploration of Optimal Stabilization Policy

Mankiw, N. Gregory - 2011

This paper examines the optimal response of monetary and fiscal policy to a decline in aggregate demand. The theoretical framework is a two-period general equilibrium model in which prices are sticky in the short run and flexible in the long run. Policy is evaluated by how well it raises the...

Persistent link: https://www.econbiz.de/10012461600

Does Fiscal Policy Matter? Blinder and Solow Revisited

Farmer, Roger E.A. - 2010

This paper uses the old-Keynesian representative agent model developed in Farmer (2010b) to answer two questions: 1) do increased government purchases crowd out private consumption? 2) do increased government purchases reduce unemployment? Farmer compared permanent tax financed expenditure paths...

Persistent link: https://www.econbiz.de/10012462012

The General Theory of Employment, Interest, and Money After 75 Years : The Importance of Being in the Right Place at the Right Time

Luzzetti, Matthew N. - 2010

This paper studies why the General Theory had so much impact on the economics profession through the 1960s, why that … impact began to wane in the 1970s, and why many economic policymakers cling to many of the tenets of the General Theory. We … qualitatively to patterns discussed in the General Theory, that econometric developments in the area of simultaneous equations made …

Persistent link: https://www.econbiz.de/10012462016

The Optimal Inflation Rate in New Keynesian Models

Coibion, Olivier - 2010

We study the effects of positive steady-state inflation in New Keynesian models subject to the zero bound on interest rates. We derive the utility-based welfare loss function taking into account the effects of positive steady-state inflation and show that steady-state inflation affects welfare...

Persistent link: https://www.econbiz.de/10012462562

Simple Analytics and Empirics of the Government Spending Multiplier and Other "Keynesian" Paradoxes

Mulligan, Casey B. - 2010

Factor supply increases (depresses) output for many of the same reasons that the government spending multiplier might be less (greater) than one. Data from three 2008-9 recession episodes - the labor supply shifts associated with the seasonal cycle, the 2009 federal minimum wage hike, and the...

Persistent link: https://www.econbiz.de/10012462850