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Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory

Clarida, Richard H.; Gali, Jordi; Gertler, Mark - National Bureau of Economic Research (NBER) - 1998

the Volcker-Greenspan period appears to have been much more sensitive to changes in expected inflation than in the pre …-Volcker period. We then compare some of the implications of the estimated rules for equilibrium properties of inflation and output …-fulfilling fluctuations in inflation and output. In contrast, the Volcker-Greenspan rule is stabilizing. …

Persistent link: https://www.econbiz.de/10005718672

Fiscal Policy and Monetary Integration in Europe

Gali, Jordi; Perotti, Roberto - National Bureau of Economic Research (NBER) - 2003

A popular view among economists, policymakers, and the media, is that the Maastricht Treaty and then Stability and Growth Pact have significantly impaired the ability of EU governments to conduct a stabilizing fiscal policy and to provide an adequate level of public infrastructure. In this...

Persistent link: https://www.econbiz.de/10005718695

Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations

Gali, Jordi - National Bureau of Economic Research (NBER) - 1996

Using data for the G7 countries, I estimate conditional correlations of employment and productivity, based on a decomposition of the two series into technology and non-technology components. The picture that emerges is hard to reconcile with the predictions of the standard Real Business Cycle...

Persistent link: https://www.econbiz.de/10005775137

Technology Shocks and Aggregate Fluctuations: How Well Does the RBS Model Fit Postwar U.S. Data?

Gali, Jordi; Rabanal, Pau - National Bureau of Economic Research (NBER) - 2004

Our answer: not so well. We reach that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the...

Persistent link: https://www.econbiz.de/10005108420

Unemployment in an Estimated New Keynesian Model

Gali, Jordi; Smets, Frank Rafael; Wouters, Rafael - National Bureau of Economic Research (NBER) - 2011

We reformulate the Smets-Wouters (2007) framework by embedding the theory of unemployment proposed in Galí (2011a,b). We estimate the resulting model using postwar U.S. data, while treating the unemployment rate as an additional observable variable. Our approach overcomes the lack of...

Persistent link: https://www.econbiz.de/10009025236

A New Keynesian Model with Unemployment

Blanchard, Olivier; Gali, Jordi - Institut für Weltwirtschaft (IfW) - 2007

setting by firms. We derive the relation between inflation and unemployment and discuss how it is influenced by the presence … of real wage rigidities. We show the nature of the tradeoff between inflation and unemployment stabilization, and we draw …

Persistent link: https://www.econbiz.de/10005700626

Macroeconomic Modeling for Monetary Policy Evaluation

Gali, Jordi; Gertler, Mark - National Bureau of Economic Research (NBER) - 2007

We describe some of the main features of the recent vintage macroeconomic models used for monetary policy evaluation. We point to some of the key differences with respect to the earlier generation of macro models, and highlight the insights for policy that these new frameworks have to offer. Our...

Persistent link: https://www.econbiz.de/10005084740

Real Wage Rigidities and the New Keynesian Model

Blanchard, Olivier; Gali, Jordi - National Bureau of Economic Research (NBER) - 2005

Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and … inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new … a trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does …

Persistent link: https://www.econbiz.de/10005085258

Understanding the Effects of Government Spending on Consumption

Gali, Jordi; Lopez-Salido, J. David; Vallés, Javier - National Bureau of Economic Research (NBER) - 2005

Recent evidence suggests that consumption rises in response to an increase in government spending. That finding cannot be easily reconciled with existing optimizing business cycle models. We extend the standard new Keynesian model to allow for the presence of rule-of-thumb consumers. We show how...

Persistent link: https://www.econbiz.de/10005085419

Monetary Policy and Unemployment

Gali, Jordi - National Bureau of Economic Research (NBER) - 2010

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

Persistent link: https://www.econbiz.de/10008635930