Jordi Galí (born January 4, 1961) is a Spanish
macroeconomist
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
who is regarded as one of the main figures in
New Keynesian macroeconomics
New Keynesian economics is a school of macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of new classical macroec ...
today. He is currently the director of the Centre de Recerca en Economia Internacional (CREI, the Center for Research in International Economics) at
Universitat Pompeu Fabra
Pompeu Fabra University ( ca, Universitat Pompeu Fabra, UPF, ; es, link=no, Universidad Pompeu Fabra) is a public university located in the city of Barcelona, Catalonia in Spain. The university was created by the Autonomous Government of Catalo ...
and a Research Professor at the
Barcelona Graduate School of Economics
The Barcelona School of Economics (BSE) is an institution for research and graduate education in economics, finance, data science, and the social sciences located in Barcelona, Spain.
The school's academic offer includes Master's degrees as well ...
. After obtaining his doctorate from MIT in 1989 under the supervision of
Olivier Blanchard
Olivier Jean Blanchard (; born December 27, 1948) is a French economist and professor who is a senior fellow at the Peterson Institute for International Economics. He was the chief economist at the International Monetary Fund from September 1, 20 ...
,
he held faculty positions at
Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
and
New York University
New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then-Secretary of the Treasury Albert Gallatin.
In 1832, the ...
before moving to Barcelona.
Research contributions
Galí's research centers on the causes of
business cycle
Business cycles are intervals of Economic expansion, expansion followed by recession in economic activity. These changes have implications for the welfare of the broad population as well as for private institutions. Typically business cycles are ...
s and on optimal
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
, especially through the lens of
time series analysis
In mathematics, a time series is a series of data points indexed (or listed or graphed) in time order. Most commonly, a time series is a sequence taken at successive equally spaced points in time. Thus it is a sequence of discrete-time data. Exa ...
. His studies with
Richard Clarida
Richard Harris Clarida (born May 18, 1957) is an American economist who served as the 21st Vice Chair of the Federal Reserve from 2018 to 2022. Clarida resigned his post on January 14th 2022 to return from public service leave to teach at Columbi ...
and
Mark Gertler suggest that monetary policy in many countries today resembles the
Taylor rule
The Taylor rule is a monetary policy targeting rule. The rule was proposed in 1992 by American economist John B. Taylor for central banks to use to stabilize economic activity by appropriately setting short-term interest rates.
The rule consider ...
, whereas the policy makers of the 1970s failed to follow the Taylor rule.
Another theme of Galí's research is how central banks should set interest rates. In some of the simplest
New Keynesian
New Keynesian economics is a school of macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of new classical macroec ...
macroeconomic models, stabilizing the
inflation rate
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
stabilizes the
output gap
The GDP gap or the output gap is the difference between actual GDP or actual output and potential GDP, in an attempt to identify the current economic position over the business cycle. The measure of output gap is largely used in macroeconomic po ...
too. If this property were roughly true in reality, it would permit central bankers to pursue a simplified
Taylor rule
The Taylor rule is a monetary policy targeting rule. The rule was proposed in 1992 by American economist John B. Taylor for central banks to use to stabilize economic activity by appropriately setting short-term interest rates.
The rule consider ...
focused only on inflation stabilization, with no need to consider output growth. Jordi Galí and
Olivier Blanchard
Olivier Jean Blanchard (; born December 27, 1948) is a French economist and professor who is a senior fellow at the Peterson Institute for International Economics. He was the chief economist at the International Monetary Fund from September 1, 20 ...
have called this property the '
divine coincidence', and have argued that in more realistic models which include additional frictions, it no longer holds. Instead, models with additional frictions (such as
frictional unemployment
Frictional unemployment is a form of unemployment reflecting the gap between someone voluntarily leaving a job and finding another. As such, it is sometimes called search unemployment, though it also includes gaps in employment when transferring ...
) imply a tradeoff between stabilizing inflation and stabilizing the output gap.
Galí is perhaps best known for providing
time series
In mathematics, a time series is a series of data points indexed (or listed or graphed) in time order. Most commonly, a time series is a sequence taken at successive equally spaced points in time. Thus it is a sequence of discrete-time data. Exa ...
evidence that improvements in
labour productivity
Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor producti ...
cause employment to decrease. This finding contradicts the predictions of some well-known
real business cycle
Real business-cycle theory (RBC theory) is a class of new classical macroeconomics macroeconomic model, models in which business-cycle fluctuations are accounted for by Real vs. nominal in economics, real (in contrast to nominal) Shock (economics) ...
models promoted by the
New Classical
New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of rigorous foundat ...
macroeconomic school, but is (according to Galí) consistent with many
New Keynesian
New Keynesian economics is a school of macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of new classical macroec ...
models. However, the statistical methods ('
structural vector autoregressions') on which this finding is based remain controversial.
Galí is the most cited author of
Journal of Monetary Economics
The ''Journal of Monetary Economics'' is a peer-reviewed academic journal covering research on macroeconomics and monetary economics. It is published by Elsevier and was established in October 1973 by Karl Brunner and Charles I. Plosser. Beginn ...
and
European Economic Review
The ''European Economic Review'' is a peer-reviewed academic journal that covers research in economics. The journal was established in 1969 and the five main editors are: Florin Bilbiie, (University of Lausanne); David K. Levine, (European Universi ...
.
Books
In 2008,
Princeton University Press
Princeton University Press is an independent publisher with close connections to Princeton University. Its mission is to disseminate scholarship within academia and society at large.
The press was founded by Whitney Darrow, with the financial su ...
published Galí's monograph ''Monetary Policy, Inflation, and the Business Cycle''. The book provides an introduction to New Keynesian
DSGE
Dynamic stochastic general equilibrium modeling (abbreviated as DSGE, or DGE, or sometimes SDGE) is a macroeconomic method which is often employed by monetary and fiscal authorities for policy analysis, explaining historical time-series data, as we ...
models, and analyzes the implications of those models for
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
. It is written at a level intended for introductory graduate courses in macroeconomics. A second edition was published in 2015.
Awards
In 2005, Galí received the
Yrjö Jahnsson Award Yrjö, a masculine Finnish given name that is the equivalent of George, may refer to:
* Yrjö von Grönhagen, (1911–2003), Finnish anthropologist
* Yrjö Jylhä, (1903–1956), Finnish poet
* Yrjö Kilpinen (1892–1959), Finnish compo ...
of the
European Economic Association
The European Economic Association (EEA) is a professional academic body which links European economists. It was founded in the mid-1980s. Its first annual congress was in 1986 in Vienna and its first president was Jacques Drèze. The current pres ...
, of which he is also a fellow, in recognition of his work on New Keynesian macroeconomics. He shared the prize with
Timothy Besley
Sir Timothy John Besley, (born 14 September 1960) is a British academic economist who is the School Professor of Economics and Political Science and Sir W. Arthur Lewis Professor of Development Economics at the London School of Economics (LSE ...
of the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 millio ...
. Thomson Reuters lists him among the 'citation laureates' who are likely future winners of the
Nobel Prize in Economics
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
.
See also
*
Barcelona Graduate School of Economics
The Barcelona School of Economics (BSE) is an institution for research and graduate education in economics, finance, data science, and the social sciences located in Barcelona, Spain.
The school's academic offer includes Master's degrees as well ...
References
External links
Galí's website at the Jordi Galí's Barcelona GSE faculty profileBarcelona GSE Research Professors
{{DEFAULTSORT:Gali, Jordi
1961 births
Living people
New Keynesian economists
Macroeconomists
Economists from Catalonia
20th-century Spanish economists
21st-century Spanish economists
Academic staff of Pompeu Fabra University
Academic staff of the Barcelona Graduate School of Economics
Fellows of the Econometric Society
Fellows of the European Economic Association