Bergholt, Drago; Røisland, Øistein; Sveen, Tommy; … - 2022
We study how monetary policy should respond to shocks which permanently alter the steady state structure of the economy …. In such a case monetary policy affects not only the short run misallocations due to nominal rigidities, but also relative … inflation to increase in the short run. Traditional monetary policy regimes, such as inflation targeting or a fixed exchange …