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This chapter aims to provide a hands-on approach to New Keynesian models and their uses for macroeconomic policy analysis. It starts by reviewing the origins of the New Keynesian approach, the key model ingredients and representative models. Building blocks of current-generation dynamic...
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interest rates as experienced in Japan since the mid-1990s. Our analysis is based on an estimated model of Japan, the United … impact of the zero bound on the effectiveness of interest rate policy in Japan in terms of stabilizing output and inflation … the zero bound and evade a potential liquidity trap. Finally, we investigate the international consequences of these …
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