Imperfect coordination in DSGE models
The resurgence of Keynes in mainstream macroeconomics
Bibliographic Data
| ID | 21604394 |
|---|---|
| Authors | Pierrick Clerc (0000-0002-5854-4276, HEC Liège, Liège, Belgium), Rodolphe Dos Santos Ferreira (0000-0001-6966-281X, University of Strasbourg – BETA, Strasbourg, France and Católica Lisbon – CUBE, Lisbon, Portugal, corresponding author) |
| Year | 2024 |
| Volume | 31 |
| Issue | 2 |
| Pages | 301-324 |
| Publication date | 2024-03-03 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | European Journal of the History of Economic Thought (JOURNAL) |
| Journal identifiers | ISSN: 0967-2567 • E-ISSN: 1469-5936 |
| Publisher | Informa UK Limited (PUBLISHER • GB) |
| DOI | 10.1080/09672567.2024.2329044 |
| OpenAlex | W4395660752 |
| Language | EN |
| Citations received | 1 |
| References cited | 48 |
The imperfect coordination of expectations and actions is a central theme running through Keynes’s General Theory. Incorporating this theme into mainstream macroeconomics, however, has proved to be a difficult endeavour. In particular, attempts to accommodate coordination failures within Dynamic Stochastic General Equilibrium (DSGE) models through multiple equilibria and “dynamic” indeterminacy, while promising in the 1990s, were gradually abandoned in the 2000s. Since then, the “New Keynesian” framework has come to dominate macroeconomic modelling. And since the coordination of agents is not at issue in this latter framework, mainstream macroeconomics has seemed to leave the coordination theme out of its focus, if not its scope. In this paper, we challenge this perception and argue that the coordination theme is actually alive and well. We especially present two recent research programmes which, while belonging to the DSGE paradigm, give pride of place to coordination failures and share a common objective: providing, within the class of DSGE models, an alternative to the New Keynesian framework that would involve the most important ideas emerging from Keynes’s General Theory
Business cycle · Dynamic stochastic general equilibrium · Economics · Imperfect · Keynesian economics · Macroeconomics · Mainstream · Monetary policy · Political science · Economic theories and models · Economic Theory and Policy · Monetary Policy and Economic Impact
The general theory of employment, interest, and money
A History of Macroeconomics from Keynes to Lucas and Beyond
The Science of Monetary Policy
Coordinating Coordination Failures in Keynesian Models
An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area
Rational Expectations and the Theory of Price Movements
Shocks and Frictions in US Business Cycles
Expectations and the neutrality of money
Technology, Employment, and the Business Cycle
Social Value of Public Information
The Standard Narrative about DSGE Models in Central Banks’ Technical Reports
Market distortions and local indeterminacy
Keynesian Economics and the Economics of Keynes
Forecasting the Forecasts of Others
Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy
Oligopolistic Pricing and the Effects of Aggregate Demand on Economic Activity
Individual Forecasting and Aggregate Outcomes
Relative Movements of Real Wages and Output
Animal Spirits, Financial Crises and Persistent Unemployment
Confidence, Crashes and Animal Spirits
The Indeterminate Fate of Sunspots in Economics
| Unique citing works | 1 |
|---|---|
| Citations per year | 0,5 |
| Citation span | 2024 - 2024 (1) |
| Citation velocity | recent |
| Highly cited | No |