The 3-Equation New Keynesian Model --- A Graphical Exposition

@article{Carln2004The3N,
  title={The 3-Equation New Keynesian Model --- A Graphical Exposition},
  author={W. Carl{\'i}n and D. Soskice},
  journal={Contributions in Macroeconomics},
  year={2004},
  volume={5}
}
  • W. Carlín, D. Soskice
  • Published 2004
  • Economics
  • Contributions in Macroeconomics
  • We 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 by central banks and captures the forward-looking thinking engaged in by the policy maker. Within a common framework, we compare our model to other monetary-rule based models that are used for teaching and policy analysis. We show that the differences among the models centre on whether the… CONTINUE READING
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