In the new Keynesian framework, disinflation policies are costly in terms of lowered output, since expectations are not rational.

Name: In the new Keynesian framework, disinflation policies are costly in terms of lowered output, since expectations are not rational.
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In the New Keynesian framework, the costliness of disinflation policies in terms of lowered output is primarily due to sticky prices and wages, not irrational expectations. New Keynesian models typically assume rational expectations.

In the New Keynesian Framework, Disinflation Policies Are Costly in Terms