Greg Mankiw: Difference between revisions
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(Created page with "'''Gregory Mankiw''', was a leading New Keynesian Economics, and contributed primarily through his work on '''menu costs''' and '''sticky prices''': # '''Menu Cost Theory''' #* Mankiw’s research showed that even '''small costs''' of changing prices (like reprinting menus) can lead to '''price stickiness''', which disrupts market equilibrium and slows economic recovery. #* This helps explain why firms '''do not continuously adjust prices''' in response to demand ch...") |
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'''Gregory Mankiw''', was a leading [[New Keynesian Economics]], and contributed primarily through his work on '''menu costs''' and '''sticky prices''': | '''Gregory Mankiw''', was a leading [[New Keynesian Economics|New Keynesian]], and contributed primarily through his work on '''menu costs''' and '''sticky prices''': | ||
# '''Menu Cost Theory''' | # '''Menu Cost Theory''' | ||
Revision as of 10:39, 16 March 2025
Gregory Mankiw, was a leading New Keynesian, and contributed primarily through his work on menu costs and sticky prices:
- Menu Cost Theory
- Mankiw’s research showed that even small costs of changing prices (like reprinting menus) can lead to price stickiness, which disrupts market equilibrium and slows economic recovery.
- This helps explain why firms do not continuously adjust prices in response to demand changes.
- Macroeconomic Policy Implications
- Since prices and wages adjust slowly, monetary and fiscal interventions are needed to stabilize output and employment.
- His work supports central bank interventions and active government policies during recessions.
- Textbook Influence
- Mankiw's macroeconomics textbooks popularized New Keynesian ideas, making them mainstream in economic education.