Macroeconomic Themes:31 Lucas Critique and the Essence of New Classical Approach: Rational expectation.

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Presentation transcript:

Macroeconomic Themes:31 Lucas Critique and the Essence of New Classical Approach: Rational expectation

Macroeconomic Themes:32 There are five essential features in a New Classical model

Macroeconomic Themes:33 Aggregate Supply and Technology Shock

Macroeconomic Themes:34 A Simple long run new classical macro economic model with the productivity shock (very similar to Ramsey (1927) problem)

Macroeconomic Themes:35 Aggregate supply

Macroeconomic Themes:36 Price Movement and Monetary Policy Rule

Macroeconomic Themes:37 Expected and Actual Prices

Macroeconomic Themes:38 Policy Irrelevance Proposition

Macroeconomic Themes:39 Policy Irrelevance Proposition

Macroeconomic Themes:310 How to Test a Rational Expectation Model?

Macroeconomic Themes:311 What do other economists think of this conclusion?

Macroeconomic Themes:312 Adaptive Expectation

Macroeconomic Themes:313 Adaptive Expectation

Macroeconomic Themes:314 Adaptive Expectation

Macroeconomic Themes:315 References

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