Comments on papers by Stefania Albanesi, V. V. Chari, and Lawrence J. Christiano and by Jordi Gali

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

The theme of these comments is that we need to remain vigilant against the possibility that “standard” modeling conventions in macroeconomics, originally introduced as experimental or tentative, start to be used unquestioningly, despite serious drawbacks. It is, in a sense, unfair to focus such comments on the papers presented in this session, because the conventions to be criticized are not at all special to these papers, but there must be some point at which we step back and consider where the conventions in our literature are headed, and a quinquennial World Congress seems as appropriate an occasion as any for doing this. I consider the papers by Gali and by Albanesi, Chari, and Christiano (hence-forth ACC) that appear in this volume; and also the empirical paper (Gali and Gertler, 1999) that forms the foundation for much of the paper in this volume that Jordi Gali presented. OPTIMAL MONETARY AND FISCAL POLICY Both papers discuss optimal monetary policy in the context of general equilibrium models. General equilibrium models, with their own internally generated, explicit measures of welfare, allow us to avoid postulating an ad hoc objective function for the policy authority, instead evaluating policy directly in terms of its welfare implications for private agents.

Original languageEnglish (US)
Title of host publicationAdvances in Economics and Econometrics
Subtitle of host publicationTheory and Applications, Eighth World Congress, Volume III
PublisherCambridge University Press
Pages198-208
Number of pages11
ISBN (Electronic)9780511610264
ISBN (Print)0521818745, 9780521818742
DOIs
StatePublished - Jan 1 2003

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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    Sims, C. A. (2003). Comments on papers by Stefania Albanesi, V. V. Chari, and Lawrence J. Christiano and by Jordi Gali. In Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress, Volume III (pp. 198-208). Cambridge University Press. https://doi.org/10.1017/CBO9780511610264.008