I. Overview Ii. Monetary Blockineconomics A. Monetary Blockinpolicy

While I view myself as an applied macroeconomist, I have worked on a broad array of topics which overlap with public finance, development, international economics, and econometrics. I believe this multidisciplinary approach has been fruitful in providing integrated treatments of different and yet related questions. In most of my work, I combine both macroeconomic and microeconomic data with rigorous theoretical and statistical analyses. This summary groups my research into five categories: i) monetary economics; ii) aggregate implications of informational frictions; iii) business cycles; iv) development, productivity and income differences; v) inequality. My research papers often fall into multiple categories and have been published (or been accepted for publication) in a variety of journals including American A significant part of my research has been devoted to studying positive and normative aspects of monetary policy, which could be both a potent stabilization tool and a source of fluctuations. Specifically, I have been interested in how monetary policy should respond to developments in the economy to improve welfare as well as in the channels through which monetary policy can affect the economy. [8]) is motivated by a central debate in the monetary policy literature: did monetary policies associated with the appointment of Paul Volcker to be chairman of the Fed in 1979 play a role in the Great Moderation, the dramatic decline in U.S. macroeconomic volatility starting in the early 1980s? This paper argues that Volcker brought two key ingredients to policy that reduced macroeconomic volatility: i) a more aggressive response to inflation; ii) a reduction in the level of trend inflation (i.e., disinflation). In a nutshell, the paper shows that the aggressiveness of the response to inflation in interest rate rules has to steeply increase with the level of trend inflation if one wants to guarantee determinacy of rational expectations equilibrium in New Keynesian models. The paper shows that the Volcker disinflation and changes in the policy reaction function were quantitatively big enough to eliminate the possibility of self-fulfilling fluctuations in calibrated New Keynesian models. Thus, like Clarida, Gali and Gertler (2000, [5]), we conclude that fluctuations in the US economy in the 1970s were at least partly driven by changes in self-fulfilling expectations and that Volcker's changes to monetary policy eliminated this source of fluctuations. But unlike Clarida et al., we emphasize that a key component of the improvement in monetary policy was also the reduction in the level of inflation …