"Central banks throughout the world predict inflation with new-Keynesian models"
" after a shock, the unemployment rate returns to its so called “natural rate’."
" That assumption is called the Natural Rate Hypothesis (NRH)."
" a body of work, published over the last decade is critical of the NRH."
" the NRH does not hold in the data "
" an alternative paradigm explains why it does not hold."
"replace the NRH with the assumption that the animal spirits of investors
are a fundamental of the economy"
" model animal spirits with a new fundamental the belief function. "
" to operationalize that idea construct an empirical model"
"compare performance to the new-Keynesian Phillips curve"
" model animal spirits with a new fundamental the belief function. "
