"We analyze optimal monetary policy in an endogenous sticky price model. Similar models with exogenous sticky prices can deliver multiplicity of equilibria. Multiplicity of equilibria is a necessary condition for expectation traps to explain the variation across time and countries of inflation...

Several papers have recently adopted the segmented markets model as a framework for monetary analysis. The characteristic assumption is that some households never participate in financial markets. This paper proves the existence of an equilibrium for segmented markets models where monetary...