This paper develops a model of pricing in which buyers care about the fairness of markups but misinfer them from prices. The model yields price rigidity, generates realistic Phillips curves, and explains why people dislike inflation so much.
This paper resolves the anomalies of the New Keynesian model at the zero lower bound—explosive recession, forward guidance puzzle, multiplier puzzle—by introducing wealth into the utility function.
This paper develops a New Keynesian model in which the government multiplier doubles when the unemployment rate rises from 5% to 8%. The multiplier is so countercyclical because in bad times, on the labor market, job rationing dwarfes matching frictions.