TY  - UNPD
A1  - Schmidt, Sebastian
A1  - Wieland, Volker
T1  - The new keynesian approach to dynamic general equilibrium modeling: models, methods, and macroeconomic policy evaluation
T2  - Working paper series / Institute for Monetary and Financial Stability ; 52
N2  - This chapter aims to provide a hands-on approach to New Keynesian models and their uses for macroeconomic policy analysis. It starts by reviewing the origins of the New Keynesian approach, the key model ingredients and representative models. Building blocks of current-generation dynamic stochastic general equilibrium (DSGE) models are discussed in detail. These models address the famous Lucas critique by deriving behavioral equations systematically from the optimizing and forward-looking decision-making of households and firms subject to well-defined constraints. State-of-the-art methods for solving and estimating such models are reviewed and presented in examples. The chapter goes beyond the mere presentation of the most popular benchmark model by providing a framework for model comparison along with a database that includes a wide variety of macroeconomic models. Thus, it offers a convenient approach for comparing new models to available benchmarks and for investigating whether particular policy recommendations are robust to model uncertainty. Such robustness analysis is illustrated by evaluating the performance of simple monetary policy rules across a range of recently-estimated models including some with financial market imperfections and by reviewing recent comparative findings regarding the magnitude of government spending multipliers. The chapter concludes with a discussion of important objectives for on-going and future research using the New Keynesian framework.
T3  - Working paper series / Institute for Monetary and Financial Stability - 52 
KW  - Monetary macroeconomics
KW  - Keynesian models
KW  - New Keynesian models
KW  - dynamic stochastic general equilibrium models
KW  - New Neoclassical synthesis
KW  - model comparison
KW  - rational expectations
KW  - policy evaluation
KW  - policy robustness
KW  - monetary and fiscal policy
Y1  - 2012
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/25256
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-252562
UR  - http://www.imfs-frankfurt.de/fileadmin/user_upload/pdf/WP_52.pdf
ER  -