Some International Evidence for Keynesian Economics Without the Phillips Curve

Roger Farmer and Giovanni Nicolo
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Giovanni Nicolo: https://www.federalreserve.gov/econres/giovanni-nicolo.htm

No 2019-032, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Farmer and Nicol (2018) show that the Farmer Monetary (FM)-model outperforms the three-equation New-Keynesian (NK)-model in post war U.S. data. In this paper, we compare the marginal data density of the FM-model with marginal data densities for determinate and indeterminate versions of the NK-model for three separate samples using U.S., U.K. and Canadian data. We estimate versions of both models that restrict the parameters of the private sector equations to be the same for all three countries. Our preferred specification is the constrained version of the FM-model which has a marginal data density that is more than 30 log points higher than the NK alternative. Our findings also demonstrate that cross-country macroeconomic differences are well explained by the different shocks that hit each economy and by differences in the ways in which national central banks reacted to those shocks.

Keywords: Bayesian Methods; General Equilibrium; indeterminacy; International Business Cycles; Keynes; Monetary policy; Phillips Curve (search for similar items in EconPapers)
JEL-codes: E00 E12 E52 F42 F44 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2019-05-29
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://www.federalreserve.gov/econres/feds/files/2019032pap.pdf (application/pdf)

Related works:
Journal Article: Some International Evidence for Keynesian Economics Without the Phillips Curve (2021)
Working Paper: Some International Evidence for Keynesian Economics Without the Phillips Curve (2019)
Working Paper: Some International Evidence for Keynesian Economics without the Phillips Curve (2019)
Working Paper: Some International Evidence for Keynesian Economics Without the Phillips Curve (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2019-32

DOI: 10.17016/FEDS.2019.032

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