Can a small New Keynesian model of the world economy with risk‐pooling match the facts?

Minford, Patrick; Ou, Zhirong; Zhu, Zheyi

doi:10.1002/ijfe.1890

Cited by 5 publications

(3 citation statements)

References 31 publications

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“…Multi-objective optimization helps businesses find a balance between multiple objectives, such as maximizing profits while also considering minimizing risks. Table 1 shows the application method data of NK model in enterprise management strategy construction [17][18].…”

Section: Framework Of Nk Model For Enterprise Management Strategymentioning

confidence: 99%

NK Model and the Construction of Enterprise Management Strategy

2024

AJBM

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The complexity of enterprise operations is increasing, especially in supply chain management and strategic planning. This study explores the NK model and its application in the construction of enterprise management strategies. By comparing the performance of the NK model with the traditional Keynesian model in three key indicators of enterprise management efficiency, market share, and profit margin, this article aims to reveal the advantages of the NK model in simulating complex market environments and enterprise decision-making. This article first constructs an NK model, selects appropriate parameters, and sets the model structure. Subsequently, through simulation experiments, this article compared the operational performance of the NK model and the traditional Keynesian model in different market environments. The experiment designed simulated markets with various economic conditions, including economic prosperity, recession, intensified competition, or changes in market demand, and designed 18 enterprises with different characteristics for these simulated markets. By simulating the management of these enterprises, this article records and observes the enterprise response and its impact on key indicators guided by two models. The research results indicate that companies managed under the NK model outperform those managed under the traditional Keynesian model in terms of management efficiency, market share, and profit margin. Under the NK model, the maximum management efficiency of enterprises can reach 97.5%, while under the traditional Keynesian model; the maximum management efficiency of enterprises is only 77.2%. In addition, under the NK model, the maximum market share of enterprises reached 9.5%, while under the traditional model, the maximum market share of enterprises was much lower. In terms of profit margin, the highest profit margin for enterprises managed by the NK model reached 28%, while the highest profit margin for enterprises under the traditional model was only 12.7%. The application of the NK model in the construction of enterprise management strategies has shown significant advantages, especially in improving the adaptability and competitiveness of enterprises to market changes.

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Section: Framework Of Nk Model For Enterprise Management Strategymentioning

confidence: 99%

NK Model and the Construction of Enterprise Management Strategy

2024

AJBM

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“…We use a three-country open-economy model modified from Minford et al (2021) to account for the broad features of the EU which is split into North and South, and their interactions with their main trading partners which are combined to represent the world economy. The North EU consists of Austria, Belgium, Estonia, Finland, Germany, Ireland, Latvia, Lithuania, Luxembourg, Netherlands and Slovakia.…”

Section: Modelmentioning

confidence: 99%

The eurozone: What is to be done to maintain macro and financial stability?

Minford

Wickens

et al. 2022

Journal of Financial Stability

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“…This problem was circumvented by Minford et al (2020) (MOZ hereafter) where they embedded the risk-pooling hypothesis and its weaker (UIP) variant in a full DSGE model and tested the model as a whole. The model took the familiar threeequation IS, Phillips Curve, Taylor Rule New Keynesian set-up of Clarida et al (1999) extended to embrace the US, Europe and the rest of the world, essentially a two-country model for the US and EU which we briefly recap below.…”

Section: Introductionmentioning

confidence: 99%

Is there Consumer Risk-Pooling in the Open Economy? The Evidence Reconsidered

Minford

Zhu

2021

Open Econ Rev

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We revisit the evidence on consumer risk-pooling and uncovered interest parity. Widely used single-equation tests are strongly biased against both. Using the full-model, Indirect Inference test, which is unbiased and has Goldilocks power according to Monte Carlo experiments, we find that both the risk-pooling hypothesis and its weaker UIP version are generally accepted as part of a full world DSGE model. The fact that the risk-pooling hypothesis, with its implication of strong cross-border consumer linkage, has passed this test with generally the highest p-value, suggests that it deserves serious attention from policy-makers looking for a relevant model with which to discuss international monetary and other business cycle policies.

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Can a small New Keynesian model of the world economy with risk‐pooling match the facts?

Cited by 5 publications

References 31 publications

NK Model and the Construction of Enterprise Management Strategy

NK Model and the Construction of Enterprise Management Strategy

The eurozone: What is to be done to maintain macro and financial stability?

Is there Consumer Risk-Pooling in the Open Economy? The Evidence Reconsidered

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