In the new Keynesian model, a credible commitment to lower inflation will cause output to rise.

Name: In the new Keynesian model, a credible commitment to lower inflation will cause output to rise.
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In the new Keynesian model, a credible commitment to lower inflation typically leads to a temporary decrease in output because it reduces inflation expectations, leading to higher real interest rates which dampen investment and consumption.

In the New Keynesian Model, a Credible Commitment to Lower