The paper provides an integrated analysis of globalization effects on the inflation-output tradeoff and monetary policy … flatten the Phillips curve, the tradeoff between inflation and activity. Second, the same globalization forces lead the … welfare-based monetary policy to be more aggressive with regard to inflation fluctuations, and at the same time, more benign …

inflation and activity. If policy makers are guided by the welfare criterion of the representative household, globalization … forces also lead monetary policy to be more aggressive with regard to inflation fluctuations but, at the same time, more …

of these shocks under different degrees of capital mobility may alter the inflation-unemployment tradeoff, i.e., the …/employment variations at the expense of bigger variations in inflation rates. When the policy maker puts heavier weight on stable employment … than on stable inflation, therefore, his/her objective can be attained more easily under capital controls …

The New-Keynesian aggregate supply derives from micro-foundations an inflation-dynamics model very much like the … tradition in the monetary literature. Inflation is primarily affected by: (i) economic slack; (ii) expectations; (iii) supply … shocks; and (iv) inflation persistence. This paper extends the New Keynesian aggregate supply relationship to include also …