On the Mechanics of New-Keynesian Models

Roman Sustek and Peter Rupert
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Peter Rupert: University of California, Santa Barbara

No 201, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: The mechanism of a standard New-Keynesian model is laid out. A particular focus is on cap- ital accumulation, the key ingredient in the transition from the basic framework to medium- scale DSGE models. The widely held view that monetary policy affects output and inflation in these models through a real interest rate channel is misguided. A decline in output and inflation is consistent with a decline, increase, or no change in the real rate. The expected path of Taylor rule shocks and the New-Keynesian Phillips Curve are key for inflation and output; the real rate largely reflects consumption smoothing.

Date: 2016
New Economics Papers: this item is included in nep-dge
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: On the mechanics of New-Keynesian models (2019)
Working Paper: On the Mechanics of New Keynesian Models (2016)
Working Paper: On the mechanics of New-Keynesian models (2016)
Working Paper: On the Mechanics of New-Keynesian Models (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:201

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