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New Keynesian Macroeconomics

  • ️Fri Jan 01 2016

Abstract

The term ‘new Keynesian economics’ refers to a body of work done by macroeconomists in the late 1970s and 1980s in which the notion of imperfect competition was introduced into macroeconomics in order to provide a micro-foundation for nominal rigidities and also to provide an alternative to supply-equals-demand equilibrium. This led in the 1990s to the new-neoclassical-synthesis approach to monetary economics in which dynamic pricing models have become central to our understanding how monetary policy influences output and inflation. Other themes in the new Keynesian approach include the effect of imperfect competition on the fiscal multiplier, and coordination failures.

This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Huw David Dixon

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  1. Huw David Dixon

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    Dixon, H.D. (2008). New Keynesian Macroeconomics. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_2401-1

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    • DOI: https://doi.org/10.1057/978-1-349-95121-5_2401-1

    • Received: 12 September 2016

    • Accepted: 12 September 2016

    • Published: 02 December 2016

    • Publisher Name: Palgrave Macmillan, London

    • Online ISBN: 978-1-349-95121-5

    • eBook Packages: Living Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

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