The New Keynesian Model is a framework that incorporates price stickiness and non-neutrality of money into the traditional Keynesian economics, emphasizing how monetary policy can affect real economic variables in the short run. This model builds on the idea that prices and wages do not adjust immediately to changes in economic conditions, leading to market imperfections and allowing for a role of active monetary policy in stabilizing the economy.
congrats on reading the definition of New Keynesian Model. now let's actually learn it.