Macroeconomic fluctuations in a New Keynesian disequilibrium model

Artikel

This study extends the current New Keynesian modeling framework by changing one crucial aspect: it replaces the general equilibrium assumption by the arguably more realistic assumption of macroeconomic disequilibrium. As a result, more complex and less smooth macroeconomic adjustment dynamics result, as it is not necessary to assume that goods and labor markets continuously clear. The disequilibrium dynamics in the form of regime-dependent output-, employment-, price- and wage fluctuations complicate the decision making problems faced by the fiscal and monetary policy makers substantially. In particular, the possibility of (multiple) regime switches implies the need for deeper analysis and careful monitoring of the disequilibrium mechanisms and dynamics when designing and implementing monetary and fiscal policies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Economic Structures ; ISSN: 2193-2409 ; Volume: 6 ; Year: 2017 ; Issue: 10 ; Pages: 1-20 ; Heidelberg: Springer

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes ; Business Fluctuations; Cycles ; General Outlook and Conditions ; International Policy Coordination and Transmission
• Subject: Disequilibrium analysis ; New Keynesian model ; Rationing ; Macroeconomic policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): van Aarle, Bas
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2017

Further information

• DOI: doi:10.1186/s40008-017-0070-2
• Handle: http://hdl.handle.net/10419/194947
• Last update: 10.03.2025, 11:45 AM CET