Optimal monetary policy and the equivalency between the one-period AD-AS model and the forward-looking New Keynesian model
AbstractIt is shown how a one-period aggregate demand-aggregate supply (AD-AS) model yields equivalent expressions for inflation and output under optimal monetary policy as a forward-looking New Keynesian model. Furthermore the advantage that the AD-AS model has over the New Keynesian specification when evaluating policy efficiency is evaluated.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 13 (2006)
Issue (Month): 9 ()
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Other versions of this item:
- Stefan Krause, 2003. "Optimal Monetary Policy and the Equivalency between the One-period AD-AS Model and the Forward-looking New Keynesian Model," Emory Economics 0317, Department of Economics, Emory University (Atlanta).
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