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• W3126013089 abstract "Abstract Optimal monetary policy is studied in a model with no contractual restrictions or physical costs of changing prices. Nevertheless, the price level is sticky in a range of mark-up indeterminacy, and inflation occurs only when employment presses against capacity. Under full information, the monetary authority can exploit price level stickiness to minimize the mark-up and keep employment at a constrained optimum without inflation. Under uncertainty, negative aggregate demand shocks produce real contractions and positive shocks raise the price level. The monetary authority can raise the likelihood that aggregate demand will maximize employment, but at the cost of higher expected inflation." @default.
• W3126013089 created "2021-02-01" @default.
• W3126013089 creator A5061887727 @default.
• W3126013089 date "1997-06-01" @default.
• W3126013089 modified "2023-09-26" @default.
• W3126013089 title "A framework for the analysis of moderate inflations" @default.
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• W3126013089 doi "https://doi.org/10.1016/s0304-3932(97)00003-2" @default.
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