Recently, much dispute has occurred about the validity of the New Keynesian model from both theoretical and empirical views. However, a few studies have analyzed this model from the empirical perspective. Few other st...Recently, much dispute has occurred about the validity of the New Keynesian model from both theoretical and empirical views. However, a few studies have analyzed this model from the empirical perspective. Few other studies have analyzed this model directly or nearly directly. This article empirically examines the New Keynesian model focusing on inflation forecast. Generalized method of moments （GMM） is used to examine whether the typical Keynesian model with Taylor rule is empirically appropriate for the US, UK, Euro area, and Japan. The results showed： （1） the New Keynesian model fits well in most cases and explains the real economy well. Taylor rule also fits well for most cases; （2） Rational expectations for inflation rates may not be useful based on this model When AR （1） （time series analysis） model is used to capture inflation expectations instead of one-time ahead real values, the model fits well. With measured expectations, the relative weight of the forward-looking terms increase on the cost of lagged inflation and output terms, even up to the point at which the lagged inflation terms are no longer needed to rescue the new Keynesian model; and （3） Forward-looking variables play more important roles than backward-looking ones in economic activity. Results with expectations with forward-looking terms perform better in general. This New Keynesian model may reduce the importance of lagged output in some cases展开更多
The major objectives of China＇s macroeconomic policy are to stabilize economic growth and inflation, which, in turn, are important factors determining key prices, such as the policy interest rate, the renminbi exchan...The major objectives of China＇s macroeconomic policy are to stabilize economic growth and inflation, which, in turn, are important factors determining key prices, such as the policy interest rate, the renminbi exchange rate and stockprices. In a framework that distinguishes different phases of the business cycle based on whether the current period＇s economic growth rate and inflation rate are above or below their ＂＇normal＂ values, this paper analyzes the interaction among macroeconomic policy, economic growth and inflation in China since the Lehman crisis, and the implications for these key prices. The path of China＇s economy indicates that stimulus measures taken by the government during the recession phase and tightening measures implemented during the overheating phase have helped minimize the fluctuation over the business cycle. Our analysis shows that Chinese authorities tend to rely more on adjusting the exchange rate than the interest rate to stabilize the economy. Comparing with conditions at the time of the post-Lehman recession, the current slowpace of economie growth in China may reflect not only weakening demand, but also a lowerpotential growth rate associated with the arrival of the Lewis turning point.展开更多
文摘Recently, much dispute has occurred about the validity of the New Keynesian model from both theoretical and empirical views. However, a few studies have analyzed this model from the empirical perspective. Few other studies have analyzed this model directly or nearly directly. This article empirically examines the New Keynesian model focusing on inflation forecast. Generalized method of moments （GMM） is used to examine whether the typical Keynesian model with Taylor rule is empirically appropriate for the US, UK, Euro area, and Japan. The results showed： （1） the New Keynesian model fits well in most cases and explains the real economy well. Taylor rule also fits well for most cases; （2） Rational expectations for inflation rates may not be useful based on this model When AR （1） （time series analysis） model is used to capture inflation expectations instead of one-time ahead real values, the model fits well. With measured expectations, the relative weight of the forward-looking terms increase on the cost of lagged inflation and output terms, even up to the point at which the lagged inflation terms are no longer needed to rescue the new Keynesian model; and （3） Forward-looking variables play more important roles than backward-looking ones in economic activity. Results with expectations with forward-looking terms perform better in general. This New Keynesian model may reduce the importance of lagged output in some cases
文摘The major objectives of China＇s macroeconomic policy are to stabilize economic growth and inflation, which, in turn, are important factors determining key prices, such as the policy interest rate, the renminbi exchange rate and stockprices. In a framework that distinguishes different phases of the business cycle based on whether the current period＇s economic growth rate and inflation rate are above or below their ＂＇normal＂ values, this paper analyzes the interaction among macroeconomic policy, economic growth and inflation in China since the Lehman crisis, and the implications for these key prices. The path of China＇s economy indicates that stimulus measures taken by the government during the recession phase and tightening measures implemented during the overheating phase have helped minimize the fluctuation over the business cycle. Our analysis shows that Chinese authorities tend to rely more on adjusting the exchange rate than the interest rate to stabilize the economy. Comparing with conditions at the time of the post-Lehman recession, the current slowpace of economie growth in China may reflect not only weakening demand, but also a lowerpotential growth rate associated with the arrival of the Lewis turning point.
