Monetary Policy, Inflation, and the Business Cycle
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Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework

Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework


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About the Book

The New Keynesian framework has emerged as the workhorse for the analysis of monetary policy and its implications for inflation, economic fluctuations, and welfare. It is the backbone of the new generation of medium-scale models under development at major central banks and international policy institutions, and provides the theoretical underpinnings of the inflation stability-oriented strategies adopted by most central banks throughout the industrialized world. This graduate-level textbook provides an introduction to the New Keynesian framework and its applications to monetary policy. Using a canonical version of the New Keynesian model as a reference framework, Jordi Gali explores issues pertaining to the design of monetary policy, including the determination of the optimal monetary policy and the desirability of simple policy rules. He analyzes several extensions of the baseline model, allowing for cost-push shocks, nominal wage rigidities, and open economy factors. In each case, the implications for monetary policy are addressed, with a special emphasis on the desirability of inflation targeting policies. * The most up-to-date and accessible introduction to the New Keynesian framework available * Uses a single benchmark model throughout * Concise and easy to use * Includes exercises * An ideal resource for graduate students, researchers, and market analysts

Table of Contents:
Preface ix CHAPTER 1: Introduction 1 CHAPTER 2: A Classical Monetary Model 15 CHAPTER 3: The Basic New Keynesian Model 41 CHAPTER 4: Monetary Policy Design in the Basic New Keynesian Model 71 CHAPTER 5: Monetary Policy Tradeoffs: Discretion versus Commitment 95 CHAPTER 6: A Model with StickyWages and Prices 119 CHAPTER 7: Monetary Policy and the Open Economy 149 CHAPTER 8: Main Lessons and Some Extensions 185 Index 195

About the Author :
Jordi Gali is director and senior researcher at the Center for Research in International Economics (CREI) and professor of economics at Universitat Pompeu Fabra in Barcelona.

Review :
"With this book, magician Gal? has pulled another important rabbit out of his hat. The book will help to increase the popularity of the New Keynesian model with graduate students, tomorrow's policymakers, and today's policymakers alike. Therefore, it can be considered a real grassroots initiative."--Christian Merkyl, Journal of Economics


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Product Details
  • ISBN-13: 9780691133164
  • Publisher: Princeton University Press
  • Publisher Imprint: Princeton University Press
  • Height: 235 mm
  • No of Pages: 224
  • Sub Title: An Introduction to the New Keynesian Framework
  • Width: 152 mm
  • ISBN-10: 0691133166
  • Publisher Date: 02 Mar 2008
  • Binding: Hardback
  • Language: English
  • Returnable: Y
  • Weight: 482 gr


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Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework
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