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New Perspectives on Monetary Policy, Inflation, and the Business Cycle

  • Jordi Gali

The present paper provides an overview of recent developments in the analysis of monetary policy in the presence of nominal rigidities. The paper emphasizes the existence of several dimensions in which the recent literature provides a new perspective on the linkages among monetary policy, inflation, and the business cycle. It is argued that the adoption of an explicitly optimizing, general equilibrium framework has not been superfluous; on the contrary, it has yielded many insights which, by their nature, could hardly have been obtained with earlier non-optimizing models.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8767.

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Date of creation: Feb 2002
Publication status: published as Dewatripont, M., L. Hansen, and S. Turnovsky (eds.) Advances in Economics and Econometrics, volume III. Cambridge University Press, 2003.
Handle: RePEc:nbr:nberwo:8767
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