New Keynesian Economics - Origins

Origins

Significant early contributions to New Keynesian theory were compiled in 1991 by editors N. Gregory Mankiw and David Romer in New Keynesian Economics, volumes 1 and 2. The papers in these volumes focused mostly on microfoundations, that is, microeconomic ingredients that could produce Keynesian macroeconomic effects, and did not yet attempt to construct complete macroeconomic models.

More recently, macroeconomists have begun to build Dynamic Stochastic General Equilibrium (DSGE) models with Keynesian features. The New Keynesian DSGE modeling methodology is explained in Michael Woodford's textbook Interest and Prices: Foundations of a Theory of Monetary Policy. Economists are now actively estimating quantitative models of this type, and using them to analyze optimal monetary and fiscal policy.

Read more about this topic:  New Keynesian Economics

Famous quotes containing the word origins:

    Grown onto every inch of plate, except
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    Compare the history of the novel to that of rock ‘n’ roll. Both started out a minority taste, became a mass taste, and then splintered into several subgenres. Both have been the typical cultural expressions of classes and epochs. Both started out aggressively fighting for their share of attention, novels attacking the drama, the tract, and the poem, rock attacking jazz and pop and rolling over classical music.
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