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Title:	The science of monetary policy: A new Keynesian perspective
Author:	Clarida, Richard; Galí, Jordi, 1961-; Gertler, Mark
Other authors:	Universitat Pompeu Fabra. Departament d'Economia i Empresa
Abstract:	This paper reviews the recent literature on monetary policy rules. We exposit 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 implicitly incorporates inflation targeting. We also characterize the gains from making credible commitments to fight inflation. In contrast to conventional wisdom, we show that gains from commitment may emerge even in the central bank is not trying to inadvisedly push output above its natural level. We also consider the implications of frictions such as imperfect information.
Subject(s):	-monetary policy -credibility -stabilization -new keynesian models -Macroeconomics and International Economics
Rights:	L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons http://creativecommons.org/licenses/by-nc-nd/3.0/es/
Document type:	Working Paper
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