The 3-Equation New Keynesian Model: A Graphical Exposition

David Soskice and Wendy Carlin

No 4588, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a graphical 3-equation New Keynesian model for macroeconomic analysis to replace the traditional IS-LM-AS model. The new graphical IS-PC-MR model is a simple version of the one commonly used in central banks and captures the forward-looking thinking engaged in by the policy-maker. We show how it can be modified to include a forward-looking IS curve and how it relates to current debates in monetary macroeconomics, including the New Keynesian Phillips Curve and the Sticky Information Phillips Curve models.

Keywords: A22 a23; New keynesian macroeconomics; Monetary policy rules; Taylor rules; New keynesian phillips curve; Sticky information phillips curve (search for similar items in EconPapers)
JEL-codes: E52 (search for similar items in EconPapers)
Date: 2004-09
New Economics Papers: this item is included in nep-hpe and nep-mac
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Citations: View citations in EconPapers (10)

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Journal Article: The 3-Equation New Keynesian Model --- A Graphical Exposition (2005)
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