Replication Code for: "A Behavioral New Keynesian Model"

Principal Investigator(s):  View help for Principal Investigator(s) Xavier Gabaix, Harvard University

Version:  View help for Version V1

Name File Type Size Last Modified
  results 02/20/2020 02:48:PM
  tex_figures 04/01/2020 05:26:PM
README.txt text/plain 3 KB 04/02/2020 06:00:AM
brnkAugmentedPermanentShock.mod text/plain 2.2 KB 02/20/2020 09:47:AM
brnkAugmentedTemporaryShock.mod text/plain 2.3 KB 02/20/2020 09:11:AM
main.m text/x-matlab 1.7 KB 02/20/2020 09:10:AM
mainBRNKAugmentedPermanentShock.m text/x-matlab 1.3 KB 02/20/2020 09:11:AM
mainBRNKAugmentedTemporaryShock.m text/x-matlab 1.3 KB 02/20/2020 08:59:AM
mainForwardGuidance.m text/x-matlab 1.6 KB 02/20/2020 09:01:AM
mainOptimalPolicy.m text/x-matlab 1.3 KB 02/20/2020 08:57:AM

Project Citation: 

Gabaix, Xavier. Replication Code for: “A Behavioral New Keynesian Model.” Nashville, TN: American Economic Association [publisher], 2020. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2020-07-23. https://doi.org/10.3886/E117842V1

Project Description

Summary:  View help for Summary 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.

Scope of Project

JEL Classification:  View help for JEL Classification
      D01 Microeconomic Behavior: Underlying Principles
      E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
      E52 Monetary Policy
      E60 Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
      E62 Fiscal Policy
      E63 Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
      E70 Macro-Based Behavioral Economics: General
      G40 Behavioral Finance: General
Data Type(s):  View help for Data Type(s) program source code


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V1 [2020-07-23]

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