Guerrazzi, Marco (2010): Expectations, employment and prices: a suggested interpretation of the new 'farmerian' economics.
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This paper aims at providing a critical assessment of the new ‘Farmerian’ economics, i.e. the recent Farmer’s attempt to provide a new micro-foundation of the General Theory grounded on modern search and business cycle theories. Specifically, I develop a theoretical model that summarizes the main arguments of the suggested approach by showing that a special importance has to be attached to the search mechanism, the choice of units and ‘animal spirits’ modelling. Thereafter, referring to self-made real-business-cycle experiments, I discuss the main empirical implications of the resulting framework. Finally, I consider its policy implications by stressing the problematic nature of demand management interventions and the advisability of extending the role of the central bank in preventing financial bubbles and crashes.
|Item Type:||MPRA Paper|
|Original Title:||Expectations, employment and prices: a suggested interpretation of the new 'farmerian' economics|
|Keywords:||Old Keynesian Economics; search; demand constrained equilibrium; Shimer puzzle; economic policy.|
|Subjects:||E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes; Keynesian; Post-Keynesian
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
|Depositing User:||Dr Marco Guerrazzi|
|Date Deposited:||10. May 2011 12:43|
|Last Modified:||23. Feb 2013 18:40|
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