Chapter 13 : Real Business Cycle Model with variables
Robert Lucas, Thomas Sargent, Neil Wallace, Robert Barro, Finn Kydland, Edward Prescott, Milton
Friedman, Thomas Cooley, Gary Hansen, John Bryant, Peter Diamond, Russell Cooper, Andrew John,
Jess Benhabib, Roger Farmer, jang-Ting Guo
Paul Krugman (2008)
Chapter 14 : New Keynsian Economics with sticky prices
J. Hicks and the IS-LM model
Paul Samuelson
The Neoclassical Synthesis
The New Keynsian Model has the property that money is not neutral. Central Banks use the market
rate (%) as a policy target rate (%), but the Central Bank controls Money Supply (Ms), and Money
Supply (Ms) is defined by the policy target rate (%), set by the market rate (%).
Note the Primary Keynsian Macroeconomic View on Government Policy :
1.)Private markets fail to operate smoothly, prices and wages are not flexible, supply does not equal
demand in all markets, and ultimately, Government intervention is required to attain economic
efficiency
2.)Fiscal and Monetary Policy can act quickly enough to counter shocks to the economy in order to
stablize a desired economic equilibrium, namely, the full employment equilibrium.
Chapter 15 : Inflation, Phillips Curve, and Neo-Fisherism
Ben Bernanke
Lawrence Summers (Secular Stagnation)
Michael Woodford
Forward Guidance
Neo-Fisherians
Taylors Rule
Robert Lucas, Thomas Sargent, Neil Wallace, Robert Barro, Finn Kydland, Edward Prescott, Milton
Friedman, Thomas Cooley, Gary Hansen, John Bryant, Peter Diamond, Russell Cooper, Andrew John,
Jess Benhabib, Roger Farmer, jang-Ting Guo
Paul Krugman (2008)
Chapter 14 : New Keynsian Economics with sticky prices
J. Hicks and the IS-LM model
Paul Samuelson
The Neoclassical Synthesis
The New Keynsian Model has the property that money is not neutral. Central Banks use the market
rate (%) as a policy target rate (%), but the Central Bank controls Money Supply (Ms), and Money
Supply (Ms) is defined by the policy target rate (%), set by the market rate (%).
Note the Primary Keynsian Macroeconomic View on Government Policy :
1.)Private markets fail to operate smoothly, prices and wages are not flexible, supply does not equal
demand in all markets, and ultimately, Government intervention is required to attain economic
efficiency
2.)Fiscal and Monetary Policy can act quickly enough to counter shocks to the economy in order to
stablize a desired economic equilibrium, namely, the full employment equilibrium.
Chapter 15 : Inflation, Phillips Curve, and Neo-Fisherism
Ben Bernanke
Lawrence Summers (Secular Stagnation)
Michael Woodford
Forward Guidance
Neo-Fisherians
Taylors Rule
