The perils of first-order conditions of New Keynesian models

Minseong Kim

MPRA Paper from University Library of Munich, Germany

Abstract: For deriving equilibrium of sticky-price/monopolistic competition New Keynesian models, first-order conditions are often used. This paper shows that they may not be sufficient and presents a case out of a simple model where there exists no equilibrium. This is true even when Taylor rule is assumed.

Keywords: New Keynesian; sticky price; monopolistic competition; consistency; first-order conditions (search for similar items in EconPapers)
JEL-codes: B41 C61 C62 E13 E52 (search for similar items in EconPapers)
Date: 2016-04-14
New Economics Papers: this item is included in nep-mac and nep-pke
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https://mpra.ub.uni-muenchen.de/71225/1/MPRA_paper_71225.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70753

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