Monetary Policy, Inflation, and the Business Cycle

"This excellent book has already become a classic reference for economists who want to study the basic New Keynesian model. This update contains important extensions such as the impact of the zero lower bound on interest rates and an explicit treatment of unemployment. The book's clear and unified exposition shows why the New Keynesian model is likely to remain a workhorse model for understanding monetary policy for a long time to come."--Frank Smets, European Central Bank"A remarkable introduction to New Keynesian economics by one of the leading authorities in the field. Clear, concise, and comprehensive. A must-read for graduate students and a go-to reference for researchers in macroeconomics."--Emmanuel Farhi, Harvard University