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Monetary Policy and Rational Asset Price Bubbles

Galí, Jordi - 2013

I examine the impact of alternative monetary policy rules on a rational asset price bubble, through the lens of an overlapping generations model with nominal rigidities. A systematic increase in interest rates in response to a growing bubble is shown to enhance the fluctuations in the latter,...

Persistent link: https://www.econbiz.de/10013086674

The Optimal Inflation Target and the Natural Rate of Interest

Andrade, Philippe - 2018

allows us not only to assess the uncertainty surrounding the optimal inflation target, but also to determine the latter while … taking into account the parameter uncertainty facing the policy maker, including uncertainty with regard to the determinants … the euro area, the slope of the curve is close to -0.9. That finding is robust to allowing for parameter uncertainty …

Persistent link: https://www.econbiz.de/10012927026

Macroeconomic Modeling for Monetary Policy Evaluation

Galí, Jordi - 2010

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/10012759756

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

Galí, 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/10013056857

Monetary Policy Rules and Macroeconomic Stability : Evidence and Some Theory

Clarida, Richard; Galí, Jordi; Gertler, Mark - 2021

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/10013216854

The Science of Monetary Policy : a New Keynesian Perspective

Clarida, Richard; Galí, Jordi; Gertler, Mark - 2021

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/10013219691

Notes for a New Guide to Keynes (I) : Wages, Aggregate Demand, and Employment

Galí, Jordi - 2021

I revisit the General Theory's discussion of the role of wages in employment determination through the lens of the New …

Persistent link: https://www.econbiz.de/10013223078

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

Galí, Jordi - 2021

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/10013223311

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

Clarida, Richard; Galí, Jordi; Gertler, Mark - 2021

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/10013252299

A Simple Framework for International Monetary Policy Analysis

Clarida, Richard; Galí, Jordi; Gertler, Mark - 2021

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/10013211639