Behavioural New Keynesian models
Robert Calvert Jump and
Paul Levine ()
Journal of Macroeconomics, 2019, vol. 59, issue C, 59-77
This paper provides a bird’s eye view of the behavioural New Keynesian literature. We discuss three key empirical regularities in macroeconomic data which are not accounted for by the standard New Keynesian model, namely, excess kurtosis, stochastic volatility, and departures from rational expectations. We then present a simple behavioural New Keynesian model that accounts for these empirical regularities in a straightforward manner. We discuss elaborations and extensions of the basic model, and suggest areas for future research.
Keywords: Behavioural macroeconomics; Heterogeneous expectations; Bounded rationality (search for similar items in EconPapers)
JEL-codes: E70 E71 E30 E32 (search for similar items in EconPapers)
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Working Paper: Behavioural New Keynesian Models (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:59:y:2019:i:c:p:59-77
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