Jordi Galí and Mark Gertler

in International Dimensions of Monetary Policy

Published by University of Chicago Press

Published in print March 2010 | ISBN: 9780226278865
Published online February 2013 | e-ISBN: 9780226278872 | DOI:

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In recent years, the potentially negative effects of globalization on the ability of national central banks to control inflation and output within its own boundaries has become a subject of great controversy. A striking feature of the global economy has been the emergence of significant imbalances in saving and investment across countries, highlighted by the large and persistent U.S. current account deficit. Most of the chapters in this book examine the implications of increased openness for monetary policy in the context of industrialized economies. Globalization is unlikely to hamper the ability of central banks to affect output, employment, and inflation, a prediction that seems to be borne by the evidence. It is found that globalization does not seem to have significantly affected the U.S. economy's key structural relations, including the slope of the Phillips curve.

Keywords: globalization; banks; inflation; global economy; Phillips curve

Chapter.  4357 words. 

Subjects: Macroeconomics and Monetary Economics

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