The State of New Keynesian Economics: A Partial Assessment
I provide an overview of recent developments in monetary economics, with an emphasis on extensions of the New Keynesian framework that assume a zero lower bound on the short term nominal rate, as well as models with household heterogeneity.
I am grateful for comments to Klaus Adam, Adrien Auclert, Davide Debortoli, Mark Gertler, Gordon Hanson, Greg Kaplan, Stephanie Schmitt-Grohé, and Tim Taylor. Christian Höynck and Cristina Manea provided excellent research assistance. I have benefited from the financial support of the Generalitat de Catalunya (AGAUR Grant 2017SGR1393) and the Ministerio de Economía, Industria y Competitividad (Grant ECO2017-87827). The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.