New Keynesian Economics (NKE) deals with issues that neo-classic macroeconomics cannot explain satisfactorily - such as involuntary unemployment and the real effects of monetary shocks - by analysing the macroeconomic consequences of goods, labour, and capital market imperfections. The conclusions of NKE economic policy differ significantly from the laissez-faire approaches entailed by neo-classic macroeconomics. This book illustrates one of NKE's most important research domains: the role of imperfect competition, information deficits and quasi-rational behaviour in determining sub-optimal macroeconomic outcomes in goods and labour markets. In order to help the reader, a standard model is used throughout the book, whereas specific results are derived analytically in the chapter appendices.
Contents: Preface - 1. From Keynes to New Keynesian Economics - 2. Imperfect Competition and Macroeconomic Equilibrium - 3. Efficiency and Insider/Outsider Wages - 4. Models with Trade Unions - 5. Imperfect Markets and Involuntary Unemployment - 6. Micro Bases of Nominal Rigidities - 7. The Philips Curve and Persistence of Unemployment - 8. Quasi-Rationality, Nominal Rigidities, and Stabilisation Policies - 9. Multiple Equilibria and Co-ordination Defects - 10. Three Final Questions - Bibliographical References
Andrea Boitani teaches Political Economy and Economic Policy in the Banking, Finance, and Insurance Science Faculty at the Catholic University in Milan.
Mirella Damiani teaches International Economy and Industrial Economics in the Political Science Faculty at the University of Perugia.