BIO
Jordi Galí (Barcelona, Spain, 1961) received his PhD in Economics from the Massachusetts Institute of Technology (MIT) in 1989, after completing a BA in Business Sciences and an MA in International Management at the ESADE school in Barcelona. He would later earn a BA in Economic Sciences at Pompeu Fabra University. Since 2001, he has combined his position as Senior Researcher at the Centre de Recerca en Economia Internacional (CREI) – where he served as director until 2017 – with a professorship in Economics at Pompeu Fabra. Galí is a Research Fellow at the Centre for Economic Policy Research (CEPR), a Research Associate at the National Bureau of Economic Research (NBER) and a Fellow of the Econometric Society. He has served as co-editor of the Journal of the European Economic Association and co-director of the CEPR International Macroeconomics Programme. In 2012 he was appointed President of the European Economic Association. Among his many distinctions, Galí shared the 2005 Yrjö Jahnsson Award with Tim Besley (15th Frontiers Laureate in Economics, Finance and Management). His research interest centers on macroeconomics and monetary theory, and he has numerous published articles to his name, notably “The Science of Monetary Policy: A New Keynesian Perspective.”
CONTRIBUTION
Jordi Galí is the architect of the three equations that support the New Keynesian model. In several articles written between the late 1990s and early 2000s, together with Mark Gertler (Frontiers of Knowledge Award in Economics in its 13th edition) and Robert Clarida, Galí partly extended and synthesized the theoretical framework that Michael Woodford had contributed to two years earlier. In those papers, they focused on the Taylor rule, a set of functions relating inflation, interest rates and another economic variable, which could be GDP growth or aggregate demand. Through it, the research was able to conclude what was the most appropriate monetary policy for a given period.
The basic New Keynesian model, as designed by Professor Galí, consists of three equations. The first equation describes the behavior of the level of economic activity as a function of the interest rate. The second equation describes the evolution of inflation as a function of the level of economic activity. And finally, there is a third equation that describes the behavior of the monetary authority, namely, the monetary policy rule implemented by the Central Bank.
