Bilbiie, Florin Ovidiu; Fujiwara, Ippei; Ghironi, Fabio - 2011
the absence of entry. Specifically, a long-run positive (negative) rate of inflation is optimal when the benefit of … by the desired markup. Plausible preference specifications and parameter values justify a long-run inflation rate of two … percent or higher. Price indexation implies even larger deviations from long-run price stability. However, price stability …