Macroeconomics and monetary policy: competing theoretical frameworks
AbstractThere is widespread agreement that monetary policy matters, but there is disagreement about how policy should be conducted. Behind this disagreement lies differences in theoretical understandings. The paper contrasts the new classical, neo-Keynesian, and Post Keynesian frameworks, thereby surfacing the differences. The new classical model has policy affecting only long-run inflation. The neo-Keynesian model has policy affecting inflation, unemployment, and real wages. The Post Keynesian model also affects growth, so policy implicitly picks a quadruple. Inflation targeting is a suboptimal policy frame because it biases decisions toward low inflation by obscuring the fact that policy also affects unemployment, real wages, and growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Journal of Post Keynesian Economics.
Volume (Year): 30 (2007)
Issue (Month): 1 (October)
Contact details of provider:
Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348
inflation targeting; monetary policy; neo-Keynesian; new classical; Post Keynesian;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Hein, Eckhard & Schoder, Christian, 2009.
"Interest rates, distribution and capital accumulation: A Post-Kaleckian perspective on the US and Germany,"
IPE Working Papers
04/2009, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
- Eckhard Hein & Christian Schoder, 2011. "Interest rates, distribution and capital accumulation -- A post-Kaleckian perspective on the US and Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(6), pages 693-723, November.
- Hein, Eckhard & Schoder, Christian, 2009. "Interest rates, distribution and capital accumulation – A Post-Kaleckian perspective on the US and Germany," MPRA Paper 18223, University Library of Munich, Germany.
- Angel Asensio, 2009. "Between the cup and the lip," Working Papers halshs-00496911, HAL.
- Thomas I. Palley, 2008.
"Macroeconomics without the LM: A Post-Keynesian Perspective,"
wp179, Political Economy Research Institute, University of Massachusetts at Amherst.
- Thomas I. Palley, 2008. "Macroeconomics without the LM: A Post-Keynesian Perspective," IMK Working Paper 13-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Codrina Rada, 2009. "Introducing Demographic Changes in a Model of Economic Growth and Income Distribution," Working Paper Series, Department of Economics, University of Utah 2009_01, University of Utah, Department of Economics.
- Angel Asensio, 2008. "(Post) Keynesian alternative to inflation targeting," Post-Print halshs-00335560, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen).
If references are entirely missing, you can add them using this form.