Bank’s Bean: give us some credit
Charlie Bean, the deputy governor responsible for monetary policy at the Bank of England, has said macroeconomists must revise their models to account for financial firms.
Bean told an audience in Barcelona on Tuesday: "We need to put credit back into macroeconomics in a meaningful way."
"The focus in the workhorse New Keynesian/New Classical DSGE model is on intrinsic dynamics resulting from inter-temporal decision-making in the face of a variety of adjustment costs and impediments to price
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