Macroeconomic Modeling for Monetary Policy Evaluation

Jordi Galí and Mark Gertler

Journal of Economic Perspectives, 2007, vol. 21, issue 4, 25-46

Abstract: We describe some of the main features of the recent vintage of macroeconomic models used for monetary policy evaluation. We point to some of the key differences with respect to the earlier generation of macro models and highlight the insights for policy that these new frameworks have to offer. Our discussion emphasizes two key aspects of the new models: 1) the significant role of expectations of future policy actions in the monetary transmission mechanism and 2) the importance for the central bank of tracking the flexible price equilibrium values of the natural levels of output and the real interest rate. We argue that both features have important implications for the conduct of monetary policy.

Date: 2007
Note: DOI: 10.1257/jep.21.4.25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (184)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jep.21.4.25 (application/pdf)

Related works:
Working Paper: Macroeconomic Modeling for Monetary Policy Evaluation (2007)
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:jecper:v:21:y:2007:i:4:p:25-46

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

Access Statistics for this article

Journal of Economic Perspectives is currently edited by Enrico Moretti

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