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New Keynesian Framework (new keynesian + framework)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Non-Atomistic Wage Setters and Monetary Policy in a New Keynesian Framework

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 8 2009
STEFANO GNOCCHI
monetary policy; unions; inflation This paper extends an otherwise standard New Keynesian (NK) model to allow for the presence of large wage setters. Building on monetary models from an earlier generation, I contribute to the NK literature by adding some new insight. It is shown that once the presence of large wage setters is taken into account, the degree of wage setting centralization and the aggressiveness of the central bank in stabilizing inflation jointly affect steady state employment. Because of this interaction, the benefits associated with inflation stabilization increase in the centralization of the wage bargaining process. [source]

Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework

THE ECONOMIC RECORD, Issue 271 2009
Mardi Dungey
No abstract is available for this article. [source]

Real Wage Rigidities and the New Keynesian Model

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 2007
OLIVIER BLANCHARD
oil price shocks; inflation targeting; monetary policy; inflation inertia Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new Keynesian framework, which we call the divine coincidence, is due to a special feature of the model: the absence of nontrivial real imperfections. We focus on one such real imperfection, namely, real wage rigidities. When the baseline new Keynesian model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face a trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does the extended model have more realistic normative implications, but it also has appealing positive properties. In particular, it provides a natural interpretation for the dynamic inflation,unemployment relation found in the data. [source]