New Keynesian economics: a monetary perspective

Stephen Williamson

Economic Quarterly, 2008, vol. 94, issue Sum, 197-218

Abstract: In this article we construct a simple analytically tractable model to explore and evaluate New Keynesian ideas. First, we show that a New Keynesian model need not exhibit Phillips curve correlations in the absence of strategic price setting by firms. Second, we conclude that New Keynesian economics needlessly neglects monetary frictions and misses out on some key insights in the process. For example, it is important to understand how the central bank should manipulate monetary quantities to support particular nominal interest rate rules

Keywords: Economics; Monetary theory (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (3)

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