-period Taylor model, discretionary policy in the Calvo model does not accommodate predetermined prices in a way that inevitably …

primary objective of monetary policy. We called this a neutral policy because it keeps output at its potential, defined as the …

multiplicity is a form of policy complementarity. Specifically, prices set in the current period embed expectations about future … policy, and actual future policy responds to these same prices. For a range of values of the fundamental state variable — a … ratio of predetermined prices — there is complementarity between actual and expected policy, and multiple equilibria occur …