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Dynamics in a New-Keynesian Model with Financial Accelerator and Uncertainty

Author

Listed:
  • Moisă ALTĂR

    (The Romanian – American University, Bucharest, Romania)

  • Alexie ALUPOAIEI

    (The Romanian – American University, Bucharest, Romania)

  • Adam ALTĂR-SAMUEL

    (The Romanian – American University, Bucharest, Romania)

Abstract

Several new stylized facts were observed in the aftermath of the recent financial crisis from the view-point of economic thinking. Here we address some of these caveats by considering the relationship between volatility of the main variables in a closed economy and the different stances related to the strength of the interlinkages between real and financial sectors. In this regard we restored a relatively simple model of New-Keynesian inspiration, extended with a financial accelerator. As compared with other models used in the literature to investigate the same kind of problems, we brought a slight modification from a structural viewpoint about which we think that it could determine important implications for the model. Relative simplicity of the model used here was assumed a priori given that our focus was somehow on the field of practical policy analysis. Given the before mentioned considerations, we investigated how different environments regarding the presence of uncertainty affect the volatility of interest variables. Not at least we studied the problem in hand separately for the cases when the short- term interest rate is set on the base of an optimal commitment plan, respectively on the base of simple rules..

Suggested Citation

  • Moisă ALTĂR & Alexie ALUPOAIEI & Adam ALTĂR-SAMUEL, 2017. "Dynamics in a New-Keynesian Model with Financial Accelerator and Uncertainty," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 51(2), pages 5-22.
    • Handle: RePEc:cys:ecocyb:v:50:y:2017:i:2:p:5-22
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    financial accelerator; commitment; New-Keynesian; rules; uncertainty; volatility;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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