Tuesday, October 4, 2016

Doc Blanchard recommends tomorrow's model builders should stick with sticky ie. The NK paradigm

Gotta love it....

This is a gem line

"starting from the New-Keynesian model, but with more realistic consumption- and price-setting equations, and adding capital and thus investment decisions."

Wow NK goes into the capital gig !

Like market power and profits of enterprise and quasi rents 
Best models assume them away in the steady paths the market system spontaneously converges to