SOURCE: Federal Reserve Bank of Richmond

December 19, 2008 12:13 ET

Richmond Fed's Economic Quarterly Explores New Keynesian Economics

"New Keynesian Economics: A Monetary Perspective" by Stephen D. Williamson

RICHMOND, VA--(Marketwire - December 19, 2008) - John Maynard Keynes published his famous "General Theory of Employment, Interest, and Money" in 1936. The book has been highly influential and has led subsequent generations of economists to revise the Keynesian framework as new theory and data emerge, giving rise to "New Keynesian Economics." In the latest issue of the Federal Reserve Bank of Richmond's Economic Quarterly, Stephen Williamson of Washington University and a visiting scholar at the Bank evaluates the overall success of the New Keynesian project. He concludes that "typical New Keynesian models ignore credit markets, monetary frictions, and banking and are, therefore, of little or no use" in addressing some of the most pressing questions facing monetary economists and central bankers. But he believes that, given recent developments in the profession, "a comprehensive theory of central banking is certainly within our grasp."

You can find the full text of this article and others in the latest issue of Economic Quarterly at:

Also in the Summer 2008 issue:

--  "Nominal Frictions, Relative Price Adjustment, and the Limits to
    Monetary Policy" by Alexander L. Wolman
--  "Understanding Monetary Policy Implementation" by Huberto M. Ennis and
    Todd Keister
--  "CEO Compensation: Trends, Market Changes, and Regulation" by Arantxa

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond's Public Affairs office at 804.697.7982.

The Federal Reserve Bank of Richmond is one of 12 District Reserve Banks that together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Richmond Fed serves the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

Contact Information

  • Contacts:
    John Weinberg
    Director of Research
    Federal Reserve Bank of Richmond

    Amanda Kramer
    Managing Editor
    Federal Reserve Bank of Richmond Economic Quarterly
    Email Contact