Question: In the New Keynesian model how should the central bank

In the New Keynesian model, how should the central bank change its target interest rate in response to each of the following shocks. Use diagrams and explain your results.
(a) There is a shift in money demand.
(b) Total factor productivity is expected to decrease in the future.
(c) Total factor productivity decreases in the present.




Sale on SolutionInn
Sales0
Views157
Comments
  • CreatedDecember 05, 2014
  • Files Included
Post your question
5000