Similar Search Results

Monetary Policy and Endogenous Financial Crises

Boissay, Frederic; Collard, Fabrice; Galí, Jordi; … - National Bureau of Economic Research - 2021

We study whether a central bank should deviate from its objective of price stability to promote financial stability. We … financial crises. We compare several interest rate rules, under which the central bank responds more or less forcefully to … central bank can both reduce the probability of a crisis and increase welfare by departing from strict inflation targeting and …

Persistent link: https://www.econbiz.de/10012794628

Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations

Galí, Jordi - 2020

I analyze an extension of the New Keynesian model that features overlapping generations of finitely-lived agents and (stochastic) transitions to inactivity. In contrast with the standard model, the proposed framework allows for the existence of rational expectations equilibria with asset price...

Persistent link: https://www.econbiz.de/10012479320

Uncovered Interest Parity, Forward Guidance, and the Exchange Rate

Galí, Jordi - 2020

Under uncovered interest parity (UIP), the size of the effect on the real exchange rate of an anticipated change in real interest rate differentials is invariant to the horizon at which the change is expected. Empirical evidence using US, euro area and UK data points to a substantial deviation...

Persistent link: https://www.econbiz.de/10012479321

Insider-Outsider Labor Markets, Hysteresis and Monetary Policy

Galí, Jordi - 2020

I develop a version of the New Keynesian model with insider-outsider labor markets and hysteresis that can account for the high persistence of European unemployment. I study the implications of that environment for the design of monetary policy. The optimal policy calls for strong emphasis on...

Persistent link: https://www.econbiz.de/10012481580

Monetary Policy and Unemployment

Galí, Jordi - 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/10012462779

Macroeconomic Modeling for Monetary Policy Evaluation

Galí, Jordi - 2007

central bank of tracking of the flexible price equilibrium values of the natural levels of output and the real interest rate …

Persistent link: https://www.econbiz.de/10012465104

The State of New Keynesian Economics : A Partial Assessment

Galí, Jordi - 2018

I provide an overview of recent developments in monetary economics, with an emphasis on extensions of the New Keynesian framework that assume a zero lower bound on the short term nominal rate, as well as models with household heterogeneity

Persistent link: https://www.econbiz.de/10012452876

The Optimal Inflation Target and the Natural Rate of Interest

Andrade, Philippe - 2018

We study how changes in the value of the steady-state real interest rate affect the optimal inflation target, both in the U.S. and the euro area, using an estimated New Keynesian DSGE model that incorporates the zero (or effective) lower bound on the nominal interest rate. We find that this...

Persistent link: https://www.econbiz.de/10012453386

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/10012459855

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

Galí, Jordi - 2012

I revisit the General Theory's discussion of the role of wages in employment determination through the lens of the New Keynesian model. The analysis points to the key role played by the monetary policy rule in shaping the link between wages and employment, and in determining the welfare impact...

Persistent link: https://www.econbiz.de/10012460009