The New Consensus from a Traditional Keynesian and Post-Keynesian Perspective
AbstractThis paper examines in how far the DSGE model which is often dubbed the New Keynesian Consensus is compatibel with a Post-Keynesian or traditional Keynesian understanding of the economy. It is argued that while at first sight DSGE models seem to include a lot of traditional Keynesian or even Post-Keynesian elements such as endogeneous money or the need for an active central bank, the mechanisms at work are completely incompatible with a traditional or Post-Keynesian understanding of the working of the macroeconomy.
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Bibliographic InfoPaper provided by IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute in its series IMK Working Paper with number 12-2009.
Length: 29 pages
Date of creation: 2009
Date of revision:
DSGE; New Keynesian Consensus; Monetary Policy; Fiscal Policy; endogenous money;
Find related papers by JEL classification:
- E00 - Macroeconomics and Monetary Economics - - General - - - General
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
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- Thomas I. Palley, 2013.
"Keynesian, Classical and New Keynesian Approaches to Fiscal Policy: Comparison and Critique,"
Review of Political Economy,
Taylor & Francis Journals, vol. 25(2), pages 179-204, April.
- Thomas I. Palley, 2012. "Keynesian, Classical and New Keynesian Approaches to Fiscal Policy: Comparison and Critique," IMK Working Paper 96-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Thomas Goda, 2013. "The role of income inequality in crisis theories and in the subprime crisis," Working Papers PKWP1305, Post Keynesian Economics Study Group (PKSG).
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