Survey_DG_2015

Abstract

A few modiÖcations to the benchmark New Keynesian model can highlight the tension between policymakers and the temptation for monetary policy to assume primary responsibility for mitigating the cycle. First, the framework requires a policy instrument that is under the control of a non-monetary authority . The second modiÖcation includes an assumption that a monetary and a nonmonetary authority set their policy instruments independently.