The 3-Equation New Keynesian Model: A Graphical Exposition
AbstractWe develop a graphical 3-equation New Keynesian model for macroeconomic analysis to replace the traditional IS-LM-AS model. The new graphical IS-PC-MR model is a simple version of the one commonly used in central banks and captures the forward-looking thinking engaged in by the policy-maker. We show how it can be modified to include a forward-looking IS curve and how it relates to current debates in monetary macroeconomics, including the New Keynesian Phillips Curve and the Sticky Information Phillips Curve models.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4588.
Date of creation: Sep 2004
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Other versions of this item:
- Carlin Wendy & Soskice David, 2005. "The 3-Equation New Keynesian Model --- A Graphical Exposition," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-38, December.
- Carlin, W & Soskice, D, 2005. "The 3-Equation New Keynesian Model - A Graphical Exposition," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-02-13 (All new papers)
- NEP-HPE-2005-02-13 (History & Philosophy of Economics)
- NEP-MAC-2005-02-13 (Macroeconomics)
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