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

  title={The 3-Equation New Keynesian Model --- A Graphical Exposition},
  author={Wendy Carlin and David Soskice},
  journal={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… 

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