New Keynesian economics, nominal rigidities and involuntary unemployment

Huw Dixon

Journal of Economic Methodology, 1999, vol. 6, issue 2, 221-238

Abstract: This paper explores the main motivations behind new Keynesian macroeconomics in the last 15 years. It focuses on the two central issues of nominal rigidity and involuntary unemployment. It argues that the Walrasian paradigm is inherently incapable of making sense of these issues except in an ad hoc manner. Both of these issues require the adoption of a framework with price and wage making agents to be properly modelled. Even if the Walrasian approach might fit the facts in a superficial way, it will be badly wrong about welfare effects of output fluctuations. The importance of imperfect competition from a methodological perspective is that it enables us to solve several anomalies simultaneously.

Keywords: new Keynesian; nominal rigidity; Involuntary unemployment (search for similar items in EconPapers)
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/13501789900000015 (text/html)
Access to full text is restricted to subscribers.

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:taf:jecmet:v:6:y:1999:i:2:p:221-238

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJEC20

DOI: 10.1080/13501789900000015

Access Statistics for this article

Journal of Economic Methodology is currently edited by John Davis and D Wade Hands

More articles in Journal of Economic Methodology from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().