Paper #1075

Título:

The new Keynesian approach to monetary policy analysis: Lessons and new directions

Autor:

Jordi Galí

Fecha:

Febrero 2008

Resumen:

I discuss several lessons regarding the design and conduct of monetary policy that have emerged out of the New Keynesian research program. Those lessons include the bene.ts of price stability, the gains from commitment about future policies, the importance of nat- ural variables as benchmarks for policy, and the bene.ts of a credible anti-inflationary stance. I also point to one challenge facing NK modelling efforts: the need to come up with relevant sources of policy tradeoffs. A potentially useful approach to meeting that challenge, based on the introduction of real imperfections, is presented.

Palabras clave:

Sticky prices, optimal policy, interest rate rules, policy tradeoffs, credibility, gains from commitment

Códigos JEL:

E52

Área de investigación:

Macroeconomía y Economía Internacional

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