Optimal Monetary Policy and the Equivalency between the One-period AD-AS Model and the Forward-looking New Keynesian Model

We show how a one-period aggregate demand - aggregate supply (AD-AS) model yields equivalent expressions for inflation and output under optimal monetary policy as a forward-looking New Keynesian model. Furthermore, we analyze the advantage the AD-AS model has over the New Keynesian specification when evaluating policy efficiency.

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Year of publication:	2003-09
Authors:	Krause, Stefan
Institutions:	Department of Economics, Emory University

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Extent:	application/pdf
Series:	Emory Economics.
Type of publication:	Book / Working Paper
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005155198