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HANK: A New Core of Usable Macroeconomics

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  • Adrien Auclert

Abstract

I argue that heterogeneous agent New Keynesian (HANK) models are a natural contender to define a new core of usable macroeconomics, replacing the IS-LM/Mundell-Fleming paradigm prevailing after the 1960s and the New Keynesian paradigm prevailing after the 1990s. HANK is "macro" (general equilibrium, aggregating up from behavior of optimizing units), is "usable" (featuring rational expectations, consistent with the known macro effects of monetary policy, and the micro behavior of consumption), and has a "core" version (stripped down, easy to teach and build upon). I discuss what we know about this new core and where more research is still needed.

Suggested Citation

  • Adrien Auclert, 2025. "HANK: A New Core of Usable Macroeconomics," AEA Papers and Proceedings, American Economic Association, vol. 115, pages 153-157, May.
    • Handle: RePEc:aea:apandp:v:115:y:2025:p:153-57
    DOI: 10.1257/pandp.20251114
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    More about this item

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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