EconPapers    
Economics at your fingertips  
 

The Two Triangles: what did Wicksell and Keynes know about macroeconomics that modern economists do not (consider)?

Ronny Mazzocchi, Roberto Tamborini and Hans-Michael Trautwein

No 906, Department of Economics Working Papers from Department of Economics, University of Trento, Italia

Abstract: The current consensus in macroeconomics, as represented by the New Neoclassical Synthesis, is to work within frameworks that combine intertemporal optimization, imperfect competition and sticky prices. We contrast this �NNS triangle� with a model in the spirit of Wicksell and Keynes that sets the focus on interest-rate misalignments as problems of intertemporal coordination of consumption and production plans in imperfect capital markets. We show that, with minimal deviations from the standard perfect competition model, a model structure can be derived that looks similar to the NNS triangle, but yields substantially different conclusions with regard to the dynamics of inflation and output gaps and to the design of the appropriate rule for monetary policy.

JEL-codes: D84 E20 E31 E32 E52 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-cba, nep-hpe, nep-mac, nep-mon and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.unitn.it/files/06_09_tamborini.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpde:0906

Access Statistics for this paper

More papers in Department of Economics Working Papers from Department of Economics, University of Trento, Italia Contact information at EDIRC.
Bibliographic data for series maintained by Luciano Andreozzi ().

 
Page updated 2025-03-20
Handle: RePEc:trn:utwpde:0906