Much recent research has focused on the development and analysis of extensions of the New Keynesianframework that model labor market frictions and unemployment explicitly. The present paper describessome of the essential ingredients and properties of those models, and their implications for...

In this paper we critically review the literature on the political economy of monetary policy, with aneye on the questions raised by the recent financial crisis. We begin with a discussion of rules versusdiscretion. We then examine the issue of Central Banks independence both in normal times and...