The New Keynesian Economics

This text offers a comprehensive presentation of the new Keynesian research programme. It covers such topics as fixprice models, real and nominal price rigidities, and coordination failures - the study of which is organized around a few basic principles, which allows a systematic view of a very large and varied literature. The important recent work which derives Keynesian results by looking at imperfections in the labour, credit and commodity markets, is analyzed. The Keynesian literature developed in the 80s on macroeconomic externalities and hysteresis is also considered. The New Keynesian Economics is designed as a textbook or teaching complement for graduate (or advanced undergraduate) macroeconomics taught although some parts (such as Part I, on real rigidities) may be of interest to students specializing in microeconomics. Professional economists should find it helpful both as a reference book and as a reader’s guide to make their own way through the literature.