Eric Sims on New Keynesian Modelling and the Future of Macroeconomics in a Low Interest Rate Environment

Eric Sims is the chair of the economics department at the University of Notre Dame and is a research associate with the National Bureau of Economic Research and the Cleveland Federal Reserve Bank. Eric, along with his colleague, Cynthia Wu, have a number of recent papers addressing monetary policy in low interest rate environments, including a keynote paper presented this past summer at the Chicago Fed Conference that was part of the Fed's big review this year. He joins the show today to talk about this work, focusing on the latest developments in New Keynesian modelling and the current state of macroeconomic research. Specifically, David and Eric discuss the Four Equation New Keynesian Model, the Desirability of NGDP Targeting, and the welfare and cyclical implications of moderate trend inflation.   Transcript for the episode: https://www.mercatus.org/bridge/commentary/eric-sims-new-keynesian-modelling-and-future-macroeconomics-low-interest-rate   Eric’s Notre Dame profile: https://www3.nd.edu/~esims1/ Eric’s NBER archive: https://www.nber.org/people/eric_sims   Related Links:   *On the Desirability of Nominal GDP Targeting* by Julio Garin, Robert Lester, & Eric Sims https://www.nber.org/papers/w21420   *The Four Equation New Keynesian Model* by Eric Sims & Jing Cynthia Wu https://www.nber.org/papers/w26067   *Raise Rates to Raise Inflation? Neo-Fisherianism in the New Keynesian Model* by Julio Garin, Robert Lester, & Eric Sims* https://www.nber.org/papers/w22177   *On the Welfare and Cyclical Implications of Moderate Trend Inflation* by Guido Ascari, Louis Phaneuf, & Eric Sims* https://www.nber.org/papers/w21392   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth