This is “Rational Expectations Redux: Monetary Policy Implications”, chapter 26 from the book Finance, Banking, and Money (v. 1.1). For details on it (including licensing), click here.
For more information on the source of this book, or why it is available for free, please see the project's home page. You can browse or download additional books there. To download a .zip file containing this book to use offline, simply click here.
Has this book helped you? Consider passing it on:
Creative Commons supports free culture from music to education. Their licenses helped make this book available to you.
DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.
Chapter 26 Rational Expectations Redux: Monetary Policy Implications
Chapter Objectives
By the end of this chapter, students should be able to:
- Describe how the new classical macroeconomic model differs from the standard, pre-Lucas AS-AD model.
- Explain what the new classical macroeconomic model suggests regarding the efficacy of activist monetary policy.
- Explain how the new Keynesian model differs from the new classical macroeconomic model.
- Assess the extent to which policymakers can improve short-run macroeconomic performance.