We propose a novel identification-robust test for the null hypothesis that an estimated new-Keynesian model has a reduced form consistent with the unique stable solution against the alternative of sunspot-driven multiple equilibria. Our strategy is designed to handle identification failures as...

In this paper, we present a novel framework for macroeconomic analysis, which tries to incorporate recent theoretical developments into a model describing an open economy. The model includes a monetary policy rule instead of the LM function together with an aggregate supply function derived from...