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Behavioral New Keynesian Models: An empirical assessment

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  • Meggiorini, Greta

Abstract

This paper uncovers the fact that cognitive discounting modeled à la Gabaix (2020) is highly generalizable to alternative models and expectational assumptions by offering a mathematically tractable way of introducing behavioral elements in linearized models. This is not the case for other models of bounded rationality, as most derivations, if not all among those proposed up to today, are algebraically too cumbersome to be of general applicability.

Suggested Citation

  • Meggiorini, Greta, 2023. "Behavioral New Keynesian Models: An empirical assessment," Journal of Macroeconomics, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:jmacro:v:77:y:2023:i:c:s0164070423000381
    DOI: 10.1016/j.jmacro.2023.103538
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    References listed on IDEAS

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    1. Stefano Gnocchi & Fanny McKellips & Rodrigo Sekkel & Laure Simon & Yinxi Xie & Yang Zhang, 2024. "The Output-Inflation Trade-off in Canada," Discussion Papers 2024-07, Bank of Canada.

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    More about this item

    Keywords

    Behavioral new Keynesian model; Bounded rationality; Cognitive discounting; Inattention; Behavioral medium-scale DSGE models; Bayesian estimation;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E70 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - General

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