The New Keynesian framework is a key tool for understanding how monetary policy affects inflation, economic ups and downs, and overall well-being. It's widely used by central banks worldwide to keep inflation stable. This textbook introduces the framework and its applications to monetary policy. By studying a basic version of the model, the author explores how to design the best monetary policy and whether simple rules are better. The model is also expanded to consider different factors like cost shocks and wage rigidities, as well as how open economies impact policy. Overall, the focus is on the benefits of targeting inflation in monetary policy.