We examine the standard New Keynesian economy's Ramsey problem written in terms of instrument settings instead of allocations. Its standard formulation makes two instruments available: the path of current and future interest rates, and an "open mouth operation" which selects one of the many...

Motivated by VAR evidence on the risk-taking channel in the US, we develop a New Keynesian model where low levels of the risk-free rate induce banks to grant credit to riskier borrowers. In the model an agency problem between depositors and equity holders incentivizes banks to take excessive...

This paper extends the existing literature on the open economy New Keynesian Phillips Curve by incorporating three different factors of production, domestic labor and imported as well as domestically produced intermediate goods, into a general model which nests existing closed economy and open...

The economics of Kalecki and of the New Keynesianism exhibit remarkable parallels. The major doctrine they have in common is that of business net worth, or equity, as the major determinant of business expansion. The New Keynesians arrive at their understanding of this point by reasoning from...

This study fitted the hybrid version of the new Keynesian Phillips curve using India time series data with aim of assessing inflation dynamics under different leaderships of the Reserve Bank Governors and the extent within which prices of imported goods contribute in the domestic inflation in...

The paper extends Woodford's (2000) analysis of the closed economy Phillips curve to an open economy with both commodity trade and capital mobility. We show that consumption smoothing, which comes with the opening of the capital market, raises the degree of strategic complementarity among...

In this paper, I embed the fiscal theory of the price level (FTPL) in a simple continuous-time New Keynesian (NK) model with capital and capital adjustment costs. I offer an elaborate analysis of determinacy, model dynamics, transmission channels and the importance of capital adjustment costs in...

In this paper, we revisit the fiscal theory of the price level (FTPL) within the New Keynesian (NK) model. We show in which cases the average maturity of government debt matters for the transmission of policy shocks. The central task of this paper is to shed light on the theoretical predictions...

In this paper, we revisit the fiscal theory of the price level (FTPL) within the New Keynesian (NK) model. We show in which cases the average maturity of government debt matters for the transmission of policy shocks. The central task of this paper is to shed light on the theoretical predictions...

We propose an easy-to-use search friction in the goods markets in medium-sized New Keynesian models. This friction allows increases in measured productivity in response to increases in expenditures via higher search effort from households. As a result markups can become procyclical and labor...