The Science of Monetary Policy: A New Keynesian Perspective

Mark Gertler, Jordi Galí and Richard Clarida

Journal of Economic Literature, 1999, vol. 37, issue 4, 1661-1707

Abstract: The 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 a credible commitment to fight inflation. In contrast to conventional wisdom, we show that gains from commitment may emerge even if 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.

JEL-codes: E12 E52 (search for similar items in EconPapers)
Date: 1999
Note: DOI: 10.1257/jel.37.4.1661
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3208)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jel.37.4.1661 (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: The Science of Monetary Policy: A New Keynesian Perspective (1999)
Working Paper: The Science of Monetary Policy: A New Keynesian Perspective (1999)
Working Paper: The science of monetary policy: A new Keynesian perspective (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jeclit:v:37:y:1999:i:4:p:1661-1707

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

Journal of Economic Literature is currently edited by Steven Durlauf

More articles in Journal of Economic Literature from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().