Two Different Views on Monetary Policy Impact: The New Consensus and Post-Keynesian Economics
The objective of this study is to make a synthesis of the differences between two new macroeconomic views. A New Consensus has arisen among neoclassical and New-Keynesian economists, such as Romer, Taylor and Walsh. This new view seeks to redefine the application of monetary policy by re-specifying...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2007-09-01
|
| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/251.pdf
|
| Summary: | The objective of this study is to make a synthesis of the differences between two new macroeconomic views. A New Consensus has arisen among neoclassical and New-Keynesian economists, such as Romer, Taylor and Walsh. This new view seeks to redefine the application of monetary policy by re-specifying the most appropriate monetary rule, which is used for inflation targeting. The framework of the monetary policy impact requires the usage of a expectations augmented Phillips curve, characterized through the lack of trade-off inflation-unemployment in the long-run. Post-keynesian macroeconomic critical, whose promoters are Arestis, Lavoie and Satterfield, argues that for most of the production levels obtained output change has no effect on inflation. This is a re-formulation of the Keynesian aggregate supply curve, which is entirely horizontal. |
|---|---|
| ISSN: | 1841-8678 1844-0029 |