Divine coincidence
In economics, divine coincidence refers to the property of New Keynesian models that there is no trade-off between the stabilization of inflation and the stabilization of the welfare-relevant output gap (the gap between actual output and efficient output) for central banks. This property is attributed to a feature of the model, namely the absence of real imperfections such as real wage rigidities. Conversely, if New Keynesian models are extended to account for these real imperfections, divine coincidence disappears and central banks again face a trade-off between inflation and output gap stabilization. The definition of divine coincidence is usually attributed to the seminal article by Olivier Blanchard and Jordi Galí in 2007.
Link from a Wikipage to another Wikipage
primaryTopic
Divine coincidence
In economics, divine coincidence refers to the property of New Keynesian models that there is no trade-off between the stabilization of inflation and the stabilization of the welfare-relevant output gap (the gap between actual output and efficient output) for central banks. This property is attributed to a feature of the model, namely the absence of real imperfections such as real wage rigidities. Conversely, if New Keynesian models are extended to account for these real imperfections, divine coincidence disappears and central banks again face a trade-off between inflation and output gap stabilization. The definition of divine coincidence is usually attributed to the seminal article by Olivier Blanchard and Jordi Galí in 2007.
has abstract
In economics, divine coinciden ...... nchard and Jordi Galí in 2007.
@en
Link from a Wikipage to an external page
Wikipage page ID
40,276,931
page length (characters) of wiki page
Wikipage revision ID
995,344,864
Link from a Wikipage to another Wikipage
wikiPageUsesTemplate
comment
In economics, divine coinciden ...... nchard and Jordi Galí in 2007.
@en
label
Divine coincidence
@en