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Replication Code for: "A Behavioral New Keynesian Model"

Version
V0
Resource Type
Dataset : program source code
Creator
  • Gabaix, Xavier (Harvard University)
Publication Date
2020-07-23
Description
  • Abstract

    This paper analyzes how bounded rationality affects monetary and fiscal policy via an empirically-relevant enrichment of the New Keynesian model. It models agents' partial myopia towards distant atypical events using a new microfounded cognitive discounting parameter. Compared to the rational model: (i) there is no forward guidance puzzle; (ii) the Taylor principle changes — with passive monetary policy but enough myopia equilibria are determinate and economies stable; (iii) the zero lower bound is much less costly; (iv) price-level targeting is not optimal; (v) fiscal stimulus is effective; (vi) the model is neo-Fisherian in the long run, Keynesian in the short run.
Availability
Download
Relations
  • Has version
    DOI: 10.3886/E117842V1
Publications
  • Gabaix, Xavier. “A Behavioral New Keynesian Model.” American Economic Review, n.d.

Update Metadata: 2020-07-23 | Issue Number: 1 | Registration Date: 2020-07-23

Gabaix, Xavier (2020): Replication Code for: "A Behavioral New Keynesian Model". Version: V0. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. https://doi.org/10.3886/E117842