Details
- A new paradigm for macroeconomics
- Overturns the natural rate hypothesis
- New suggestion for how to conduct monetary policy
- Explains the limitations of fiscal policy
- Explains how inflation and unemployment can coexist
Expectations, Employment and Prices brings Keynesian economics into the 21st century by providing a new paradigm that explains how high unemployment could potentially persist forever without a little help from the government. The book fills in logical gaps that were missing from Keynes' General Theory of Employment Interest and Money by reconciling some of its key ideas with modern economic theory. Central bankers throughout the world are talking now about developing a second instrument of monetary policy in addition to controlling the interest rate. This book directly addresses this issue and offers new creative monetary policy proposals and suggestions for the design of new financial institutions for the 21st century.
Readership: Academics. Graduate Students. Central Bankers. Undergraduate Students. Financial professionals. Anyone with a degree in economics.
Preface ix
1.: The Theory of Unemployment
2.: TheBasicModel
3.: An Extension to Multiple Goods
4.: Investment and Saving
5.: Business Cycle Facts
6.: The Great Depression
7.: The War-Time Recovery
8.: 1951 to 2000: Employment and Gdp
9.: Money and Uncertainty
10.: Money and Inflation Since 1951
11.: How to Fix the Economy
Roger Farmer, Professor of Economics, University of California, Los Angeles
Roger E. A. Farmer is Professor and Department Chair at UCLA Department of Economics. He is a Research Associate of the National Bureau of Economic Research and the Centre for Economic Policy Research, and coeditor of the International Journal of Economic Theory. He is a member of the Financial Times Economists Forum, a specialist on macroeconomic theory and the author of five books and numerous scholarly articles.
"This is an ambitious book. We need to develop new approaches to business cycles and unemployment. Roger Farmer's attempt is refreshing, insightful and bold."--Daron Acemoglu, Charles P. Kindleberger Professor of Applied Economics, MIT and Co-Editor of Econometrica
"This book is modestly represented by its author as an extension to Keynesian economics. But I am more inclined to represent it as a new tradition, 'Farmerian economics.' While both are intended to provide justification for active countercyclical policy in the face of market failure, the microfoundations for Farmerian economics are much stronger than those of John Maynard Keynes. Farmerian economics is as distinct from Keynesian and New Keynesian economics as Lucasian economics is from Classical and New Classical Economics."--William A. Barnett, Oswald Distinguished Professor of Macroeconomics, University of Kansas, and Editor, Macroeconomic Dynamics
"In this important book, Roger Farmer challenges the commonly accepted structure of modern DSGE models. Since these models are still, at their core, neoclassical constructs they miss much of the intuition of Keynes' original contribution. Farmer builds microfounded dynamic equilibrium models that can generate persistent inefficient equilibria with high levels of unemployment. He confronts these models with data, and uses them to argue for vigorous government policies to avoid those situations. In this way, Farmer not only greatly enriches our understanding of dynamic macroeconomics, but shows how its tools can be applied to many different environments with a surprising level of flexibility and power. An insightful work that all macroeconomists interested in business cycles should read."--Jesus Fernandez-Villaverde, Associate Professor of Economics, University of Pennsylvania
"What did Keynes really mean? How much of Keynesian intuition can be formulated using the language of modern macroeconomics? If you want to find out, read this creative and fascinating book. It uses tools from search theory and self-fulfilling equilibria to breathe new life into old debates. Keynes is dead. Long live Roger Farmer!"--Harald Uhlig, Professor and Chair, Department of Economics, The University of Chicago and Co-Editor of Econometrica
