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Other Papers on :Interest rates and Monetary Policy

P/E/307. Theories of business cycles: New Classical model vs. New Keynesian model

(2006, 2000 words)

The paper reports on New Keynesian and New Classical models in economics showing the difference between their attitudes to market clearing and unemployment. Two opposite scenarios of anticipated vs. unanticipated changes in money supply are analyzed; the hypothesis of rational expectations (RE) and stabilisation policies are discussed.
 
   
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