INSTITUTIONAL APPROACH TO MACROECONOMIC ANALYSIS

Modern financial crisis has forced researchers to look for new ways to explain macroeconomic phenomena. In particular, this led to the approach, called "New Monetarism". A distinctive feature of the new approach is the application of institutional ideas in the macroeconomic analysis. For best results in the study of the impact of external shocks on the economy the new approach included the analysis of institutions that determine this impact to the macroeconomic model. This paper studies the theoretical foundations of the new approach, analyzes its place and role in modern macroeconomic analysis. The author focuses on the innovative introduction of money in the macroeconomic model, that the new approach allowed unconventional analysis of the modern macroeconomic problems.