Jordi Galí: Difference between revisions
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'''Jordi Galí''' is a [[Catalonia|Catalan]] [[macroeconomics|macroeconomist]] who is regarded as one of the main figures in [[New Keynesian economics|New Keynesian macroeconomics]] today. He is currently the director of the Centre de Recerca en Economía Internacional (CREI, the Center for Research in International Economics) at [[Universitat Pompeu Fabra]] in Barcelona. After obtaining his doctorate from MIT under the supervision of Olivier Blanchard, he held faculty positions at [[Columbia University]] and [[New York University]], before coming to Barcelona. |
'''Jordi Galí''' is a [[Catalonia|Catalan]] [[macroeconomics|macroeconomist]] who is regarded as one of the main figures in [[New Keynesian economics|New Keynesian macroeconomics]] today. He is currently the director of the Centre de Recerca en Economía Internacional (CREI, the Center for Research in International Economics) at [[Universitat Pompeu Fabra]] in Barcelona. After obtaining his doctorate from MIT under the supervision of Olivier Blanchard, he held faculty positions at [[Columbia University]] and [[New York University]], before coming to Barcelona. |
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Galí's research centers on the causes of [[business cycle]]s and on optimal [[monetary policy]], especially through the lens of [[time series analysis]]. His studies with [[Richard Clarida]] and [[Mark Gertler]] suggest that monetary policy in many countries today resembles the [[Taylor rule]], whereas the policies of the 1970s failed to follow the Taylor rule.<ref>Clarida, Richard; Mark Gertler; and Jordi Galí (2000), 'Monetary policy rules and macroeconomic stability: theory and some evidence.' ''Quarterly Journal of Economics'' 115. pp. 147-180.</ref><ref>Clarida, Richard; Mark Gertler; and Jordi Galí (1998), 'Monetary policy rules in practice: some international evidence.' ''European Economic Review'' 42 (6), pp. 1033-67.</ref> Together with Olivier Blanchard, he has shown that in the simplest [[New Keynesian economics|New Keynesian]] macroeconomic models, stabilizing the [[inflation rate]] stabilizes the [[output gap]] too, a proposition they called the '[[divine coincidence]]'.{{Fact|date=December 2007}} However, in more recent work they have shown that more realistic models that include additional frictions (such as [[Unemployment types#frictional|frictional unemployment]]) imply that there is a tradeoff between stabilizing inflation and stabilizing the output gap.{{Fact|date=December 2007}} |
Galí's research centers on the causes of [[business cycle]]s and on optimal [[monetary policy]], especially through the lens of [[time series analysis]]. His studies with [[Richard Clarida]] and [[Mark Gertler]] suggest that monetary policy in many countries today resembles the [[Taylor rule]], whereas the policies of the 1970s failed to follow the Taylor rule.<ref>Clarida, Richard; Mark Gertler; and Jordi Galí (2000), 'Monetary policy rules and macroeconomic stability: theory and some evidence.' ''Quarterly Journal of Economics'' 115. pp. 147-180.</ref><ref>Clarida, Richard; Mark Gertler; and Jordi Galí (1998), 'Monetary policy rules in practice: some international evidence.' ''European Economic Review'' 42 (6), pp. 1033-67.</ref> |
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Together with Olivier Blanchard, he has shown that in the simplest [[New Keynesian economics|New Keynesian]] macroeconomic models, stabilizing the [[inflation rate]] stabilizes the [[output gap]] too, a proposition they called the '[[divine coincidence]]'.{{Fact|date=December 2007}} If this property were roughly true in reality, it would permit central bankers to pursue a simplified [[Taylor rule]] focused only on inflation stabilization, with no need to attempt to estimate [[potential GDP]].<ref>[http://economistsview.typepad.com/economistsview/2005/09/mankiw_discusse.html Comments by N. Gregory Mankiw on the 'divine coincidence'.]</ref> However, in more recent work they have shown that more realistic models that include additional frictions (such as [[Unemployment types#frictional|frictional unemployment]]) imply that there is a tradeoff between stabilizing inflation and stabilizing the output gap.{{Fact|date=December 2007}} |
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Galí is perhaps best known for providing [[time series analysis|time series]] evidence that improvements in productivity cause employment to decrease, contradicting the predictions of some well-known [[Real business cycles|real business cycle]] models promoted by the [[New classical economics|New Classical]] macroeconomic school.<ref>Galí, Jordi (1999), 'Technology, employment, and the business cycle: Do technology shocks explain aggregate fluctuations?' ''American Economic Review'' 89 (1), pp. 249-71.</ref> However, the statistical methods ('[[SVAR|structural vector autoregression]]s') on which his findings are based remain controversial.{{Fact|date=December 2007}} |
Galí is perhaps best known for providing [[time series analysis|time series]] evidence that improvements in productivity cause employment to decrease, contradicting the predictions of some well-known [[Real business cycles|real business cycle]] models promoted by the [[New classical economics|New Classical]] macroeconomic school.<ref>Galí, Jordi (1999), 'Technology, employment, and the business cycle: Do technology shocks explain aggregate fluctuations?' ''American Economic Review'' 89 (1), pp. 249-71.</ref> However, the statistical methods ('[[SVAR|structural vector autoregression]]s') on which his findings are based remain controversial.{{Fact|date=December 2007}} |
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Revision as of 11:36, 14 December 2007
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Jordi Galí is a Catalan macroeconomist who is regarded as one of the main figures in New Keynesian macroeconomics today. He is currently the director of the Centre de Recerca en Economía Internacional (CREI, the Center for Research in International Economics) at Universitat Pompeu Fabra in Barcelona. After obtaining his doctorate from MIT under the supervision of Olivier Blanchard, he held faculty positions at Columbia University and New York University, before coming to Barcelona.
Galí's research centers on the causes of business cycles and on optimal monetary policy, especially through the lens of time series analysis. His studies with Richard Clarida and Mark Gertler suggest that monetary policy in many countries today resembles the Taylor rule, whereas the policies of the 1970s failed to follow the Taylor rule.[1][2]
Together with Olivier Blanchard, he has shown that in the simplest New Keynesian macroeconomic models, stabilizing the inflation rate stabilizes the output gap too, a proposition they called the 'divine coincidence'.[citation needed] If this property were roughly true in reality, it would permit central bankers to pursue a simplified Taylor rule focused only on inflation stabilization, with no need to attempt to estimate potential GDP.[3] However, in more recent work they have shown that more realistic models that include additional frictions (such as frictional unemployment) imply that there is a tradeoff between stabilizing inflation and stabilizing the output gap.[citation needed]
Galí is perhaps best known for providing time series evidence that improvements in productivity cause employment to decrease, contradicting the predictions of some well-known real business cycle models promoted by the New Classical macroeconomic school.[4] However, the statistical methods ('structural vector autoregressions') on which his findings are based remain controversial.[citation needed]
Notes and References
- ^ Clarida, Richard; Mark Gertler; and Jordi Galí (2000), 'Monetary policy rules and macroeconomic stability: theory and some evidence.' Quarterly Journal of Economics 115. pp. 147-180.
- ^ Clarida, Richard; Mark Gertler; and Jordi Galí (1998), 'Monetary policy rules in practice: some international evidence.' European Economic Review 42 (6), pp. 1033-67.
- ^ Comments by N. Gregory Mankiw on the 'divine coincidence'.
- ^ Galí, Jordi (1999), 'Technology, employment, and the business cycle: Do technology shocks explain aggregate fluctuations?' American Economic Review 89 (1), pp. 249-71.