This paper presents a simple general equilibrium model in which the only non-Walrasian feature is imperfect competition in the goods market. The model is shown to exhibit various Keynesian characteris
The Heterogeneous-Agent New Keynesian literature has revisited the transmission of monetary and fiscal policy to consumption using models where heterogeneous households face idiosyncratic income risk
Old- style Keynesian models relied on sticky prices or wages to explain unemployment and to argue for demand-side macroeconomic policies. This approach relied increasingly on a Phillips-curve view of
We argue that a 2-agent version of the standard New Keynesian modelwhere a worker receives only labor income and a capitalist only profit income offers insights about how income inequality affects the
ABSTRACT The article uses Keynes’ ideas to analyze New Keynesian economics, its assumptions and its most important corollaries. It examines the crucial assumption of New Keynesian economics: the stick
