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Monday, September 18, 2017

Indeterminacy, the Belief Function and Reinventing IS-LM

Roger Farmer:

Indeterminacy, the Belief Function and Reinventing IS-LM: This is my final post featuring research presented at the conference on Applications of Behavioural Economics and Multiple Equilibrium Models to Macroeconomics Policy Conference held at the Bank of England on July 3rd and 4th 2017.
Today I will talk about the work of two of my graduate students and co-authors, Giovanni Nicolò and Konstantin Platonov. Both of them gave presentations at the conference. ...
Giovanni’s research is on the empirics of models with multiple equilibria and sunspots. ...
The final conference paper that I will discuss in this series, “Animal Spirits in a Monetary Economy”, was co-authored by myself and Konstantin Platonov. Konstantin presented our paper at the conference and we wrote about our work for VOX here.
I have been critical of the IS-LM model in several of my posts. My paper with Konstantin  fixes some of the more salient problems of IS-LM by reintroducing two key ideas from Keynes. 1. The confidence fairy is real. 2. If confidence remains depressed, high unemployment can exist forever.  Our Vox piece presents the key findings of the paper in simple language. ...

    Posted by on Monday, September 18, 2017 at 02:50 AM in Academic Papers, Economics | Permalink  Comments (6)


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