Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework / Edition 1

Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework / Edition 1

by Jordi Gali
     
 

ISBN-10: 0691133166

ISBN-13: 9780691133164

Pub. Date: 02/11/2008

Publisher: Princeton University Press

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

Overview

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 Galí 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


Product Details

ISBN-13:
9780691133164
Publisher:
Princeton University Press
Publication date:
02/11/2008
Edition description:
Older Edition
Pages:
224
Product dimensions:
6.30(w) x 9.30(h) x 0.90(d)

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

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