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Behavioural New Keynesian models

Levine, Paul; Jump, Robert Calvert

Authors

Paul Levine



Abstract

© 2018 This paper provides a bird's eye view of the behavioural New Keynesian literature. We discuss three key empirical regularities in macroeconomic data which are not accounted for by the standard New Keynesian model, namely, excess kurtosis, stochastic volatility, and departures from rational expectations. We then present a simple behavioural New Keynesian model that accounts for these empirical regularities in a straightforward manner. We discuss elaborations and extensions of the basic model, and suggest areas for future research.

Citation

Levine, P., & Jump, R. C. (2019). Behavioural New Keynesian models. Journal of Macroeconomics, 59, 59-77. https://doi.org/10.1016/j.jmacro.2018.11.002

Journal Article Type Article
Acceptance Date Nov 15, 2018
Online Publication Date Nov 20, 2018
Publication Date Mar 1, 2019
Publicly Available Date Nov 21, 2019
Journal Journal of Macroeconomics
Print ISSN 0164-0704
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 59
Pages 59-77
DOI https://doi.org/10.1016/j.jmacro.2018.11.002
Keywords behavioural macroeconomics, heterogeneous expectations, bounded rationality
Public URL https://uwe-repository.worktribe.com/output/849697
Publisher URL https://doi.org/10.1016/j.jmacro.2018.11.002
Additional Information Additional Information : This is the author's accepted manuscript. The final published version is available here: https://doi.org/10.1016/j.jmacro.2018.11.002.

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