This paper contrasts the new style of doing macroeconomics, where the emphasis is on propositions rigorously derived from neoclassical micro foundations, with the old style associated with the work of Keynes in particular. The paper argues that the latter type of model, which is based on more...

The recent great financial crisis and the ensuing deep recessions have placed in sharp relief the fundamental issue of how financial factors, including financial instability, interact with the real economy. In order to understand the nature of these interactions and formulate policies that would...

The IMF monetary model focuses on the balance of payments. This paper adds a poverty stabilization objective to it. Drawing on statistical income distribution theory, key aspects of the head count poverty indicator are introduced. The resulting model reproduces traditional balance of payments...