Open Economy Keynesian Macroeconomics Without the LM Curve
16 Pages Posted: 31 Mar 2013
Date Written: February 1, 2013
In this paper, we present a novel framework for macroeconomic analysis, which tries to incorporate recent theoretical developments into a model describing an open economy. The model includes a monetary policy rule instead of the LM function together with an aggregate supply function derived from the Phillips curve, and is later extended to describe the case of a monetary union. This new approach should be useful for teaching purposes.
Keywords: Macroeconomics, monetary rule, open economy, monetary union
JEL Classification: A22, A23, E12, F41
Suggested Citation: Suggested Citation