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The Science of Monetary Policy : A New Keynesian Perspective

Clarida, Richard - 1999

This paper reviews the recent literature on monetary policy rules. We exploit the monetary policy design problem within a simple baseline theoretical framework. We then consider the implications of adding various real world complications. Among other things, we show that the optimal policy...

Persistent link: https://www.econbiz.de/10012471647

Labor Markets and Monetary Policy : A New-Keynesian Model with Unemployment

Blanchard, Olivier - 2008

We construct a utility-based model of fluctuations, with nominal rigidities and unemployment, and draw its implications … for the unemployment-inflation tradeoff and for the conduct of monetary policy.<br><br>We proceed in two steps. We first … unemployment in the constrained efficient allocation. We then focus on the implications of alternative real wage setting mechanisms …

Persistent link: https://www.econbiz.de/10012464750

Optimal Monetary and Fiscal Policy in a Currency Union

Gali, Jordi - 2005

We lay out a tractable model for fiscal and monetary policy analysis in a currency union, and analyze its implications for the optimal design of such policies. Monetary policy is conducted by a common central bank, which sets the interest rate for the union as a whole. Fiscal policy is...

Persistent link: https://www.econbiz.de/10012466856

Monetary Policy and Exchange Rate Volatility in a Small Open Economy

Gali, Jordi - 2002

We lay out a small open economy version of the Calvo sticky price model, and show how the equilibrium dynamics can be reduced to a tractable canonical system in domestic inflation and the output gap. We employ this framework to analyze the macroeconomic implications of three alternative monetary...

Persistent link: https://www.econbiz.de/10012469809

A Simple Framework for International Monetary Policy Analysis

Clarida, Richard - 2002

We study the international monetary policy design problem within an optimizing two-country sticky price model, where each country faces a short run tradeoff between output and inflation. The model is sufficiently tractable to solve analytically. We find that in the Nash equilibrium, the policy...

Persistent link: https://www.econbiz.de/10012469845

New Perspectives on Monetary Policy, Inflation, and the Business Cycle

Gali, Jordi - 2002

The present paper provides an overview of recent developments in the analysis of monetary policy in the presence of nominal rigidities. The paper emphasizes the existence of several dimensions in which the recent literature provides a new perspective on the linkages among monetary policy,...

Persistent link: https://www.econbiz.de/10012469948

Optimal Monetary Policy in Closed versus Open Economies : An Integrated Approach

Clarida, Richard - 2001

This paper develops a new open economy macro model of optimal monetary for a small open economy. Our main result is that in this model, the optimal policy problem for the small open economy is isomorphic to the closed economy case studied in Clarida, Gali, Gertler (1999). In particular, the...

Persistent link: https://www.econbiz.de/10012470112

Monetary Policy Rules and Macroeconomic Stability : Evidence and Some Theory

Clarida, Richard - 1998

We estimate a forward-looking monetary policy reaction function for the postwar US economy, pre- and post-October 1979. Our results point to substantial differences in the estimated rule across periods. In particular, interest rate policy in the Volcker-Greenspan period appears to have been much...

Persistent link: https://www.econbiz.de/10012472363

The Effects of Monetary Policy on Stock Market Bubbles : Some Evidence

Gali, Jordi - 2014

We estimate the response of stock prices to exogenous monetary policy shocks using a vector-autoregressive model with time-varying parameters. Our evidence points to protracted episodes in which, after a short-run decline, stock prices increase persistently in response to an exogenous tightening...

Persistent link: https://www.econbiz.de/10012458683