Best U.S. departments in DSGE and New Keynesian Models

[Adamo Smith]

Hi guys,


I am an European student and wish to apply also for some U.S. universities. However my very field of interest are DSGE models and in particular New Keynesian models so I am interested in departments that are good in these models.

Does anyone know something about?

Best

[piffle_dragon]

I think my vote would be NYU.

[Gecko]

UPenn too

[georgeruc]

I think now there is no Keynesian/Neo-classical division in Macro with DSGE method.

[piffle_dragon]

Not sure if this is true as I would have listed Minnesota as an option if the user had not specified his preference for Neo-Keynesian models.

[SpookyElectric]

Not that I am exactly unbiased, but Columbia has some excellent macro people working on New Keynesian DSGE.

[beagle07]

Certainly Columbia and NYU.

Also, a response to:

Originally Posted by georgeruc

I think now there is no Keynesian/Neo-classical division in Macro with DSGE method.

I don't think this is true. I think the "New Keynesian" approach in Woodford's "Interest and Prices," for example, is still rather controversial. There have been a number of recent papers that illustrate there is indeed a divide in the DSGE world. For example, there is the Chari/Kehoe paper "NEW KEYNESIAN MODELS: NOT YET USEFUL FOR POLICY ANALYSIS." Also, Golosov and Lucas have the paper "Menu Costs and Phillips Curves." While both the NYU/Columbia and Minnesota/Chicago folks use the DSGE framework, they are very much divided on sticky prices and the real effects of monetary policy.

[georgeruc]

To beagle07,
Yes, you are right. But, people work on DSGE often try to polish a story with market friction, and sticky price is one of them. I read both of the papers you mentioned. And you may read some comments from Narayana Kocherlakota on financial crisis. Now he is the chair of Fed,Minneapolis.

[Bored]

Originally Posted by beagle07

Certainly Columbia and NYU.
I don't think this is true. I think the "New Keynesian" approach in Woodford's "Interest and Prices," for example, is still rather controversial.

I would disagree. I think there is broad acceptance of the importance of nominal rigidities in Macro models. Outside of Minnesota it is completely standard.

All this noise about Business Cycle Accounting is still not mainstream, mostly because it has robustness problems and no clear implications regarding which frictions map into which wedges.

There are certainly issues with stickiness to be figured out. Most importantly, the observed frequency of price change seem to imply that money is essentially neutral (ala Golosov/Lucas), but for most people stories like rational inattention and reference prices make enough sense to resolve this puzzle. I think the challenges for the literature is to link more closely with micro level price setting behavior, but there is not really an alternative paradigm.

[Adamo Smith]

Hi everyone,

thanks for your suggestions. Indeed I be;lieve that there is indeed a divide between general DSGE and their application to NKM.

However what do you think about Northwestern University (Evanston , Illinois) and prof. Lawrence Christiano? He is actually visiting Europe twice a year and teaching intensive course in DSGE and DYNARE at Tinbergen Institute in Amsterdam and also collaborates with main NKM brains in Europe such as Gali Jordi of Pompeu Fabra.

Could Northwestern compete with NYU and Columbia within NKM framework?