New Keynesian economics: abridged

... beyond the point of usefulness, dalam sepuluh langkah mudah*.

1. Real Business Cycle economists say the RBC model works. Here's how it works.
2. Other economists argue that actually, the RBC model isn't so great. Here are some critiques.
3. RBC doesn't care about money, but money actually affects real economy. Here's some evidence from VAR.
4. Unless you are taking a shortcut, adding money to RBC does nothing. Here's how you get money neutrality.
5. If you add monopoly, price now has mark ups over marginal cost of production. Here's how the Dixit-Stiglitz setup works.
6. If your firm can’t always adjust your price, when you do adjust it, you’ll take into account of the future where you can’t adjust your price. Here’s how the Calvo fairy works.
7: Shocks will change things. Here’s some predictions, though they aren’t always good (here are some critiques). Nonetheless, it’s the best model that we have for now.
8. If your central bank doesn’t want to commit, they should lean against the wind to respond to cost-push shock. Lean on the interest rate aggressively to respond to inflation.
9. If you can commit, it will bring benefits. Here’s how tying yourself to the mast will save you from the sirens.
10. When you can’t lower your interest rate any further, committing to inflation (or government spending) will ease your slump. Here’s how.

(* Yang sebenarnya ngga mudah juga. Tapi paling ngga saya masih bisa berhitung jadi penyajiannya beneran dalam sepuluh langkah.)

Adenda:

- Judul dicuri dari sini.

- Masih merasa ringkasan ini terlalu panjang? Ya sudah, intinya kuartal ini saya belajar tentang: uang. Ini adalah kelanjutan dari semester lalu yang dibagi menjadi dua kuartal: pertumbuhan (growth) dan ketidakpastian (uncertainties). Kuartal sekarang adalah kuartal kapita selekta: kelas makro saya akan membahas bunga rampai teori model pengangguran, perpajakan, dan ??? (belum ada di silabus).

- Kuartal depan? @#@??#$$#@!T_T@#@OTL