Monetary Policy, Inflation, and the Business Cycle
Subtitle: An Introduction to the New Keynesian Framework
Publisher: Princeton University Press
Published: 2008
Place of publication: Princeton, NJ, USA
Language: eng
Format: Hardcover
Number of pages: 224
ISBN-13: 9780691133164
Copyright date: 2008
Description: The New Keynesian framework has emerged as the workhorse for the analysis of monetary policy and its implications for inflation, economic fluctuations, and welfare. It is the backbone of the new generation of medium-scale models under development at major central banks and international policy institutions, and provides the theoretical underpinnings of the inflation stability-oriented strategies adopted by most central banks throughout the industrialized world. This graduate-level textbook provides an introduction to the New Keynesian framework and its applications to monetary policy.

Using a canonical version of the New Keynesian model as a reference framework, Jordi Gal� explores issues pertaining to the design of monetary policy, including the determination of the optimal monetary policy and the desirability of simple policy rules. He analyzes several extensions of the baseline model, allowing for cost-push shocks, nominal wage rigidities, and open economy factors. In each case, the implications for monetary policy are addressed, with a special emphasis on the desirability of inflation targeting policies.

The most up-to-date and accessible introduction to the New Keynesian framework available
Uses a single benchmark model throughout
Concise and easy to use
Includes exercises
An ideal resource for graduate students, researchers, and market analysts
--front flap
Table of contents: title: Introduction --; title: A classical monetary model --; title: The basic new Keynesian model --; title: Monetary policy design in the basic new Keynesian model --; title: Monetary policy tradeoffs: discretion vs. commitment --; title: A model with sticky wages and prices --; title: Monetary policy and the open economy --; title: Main lessons and some extensions.