Adão, Bernardino; Correia, Isabel; Teles, Pedro - In: Journal of the European Economic Association 2 (2004) 2-3, pp. 310-319
We study environments with sticky prices, wages, or portfolios where it is feasible and optimal to use monetary policy to replicate the allocation under full flexibility. In these environments the optimal policy does not depend on the scope of the frictions. In this sense, the strength of the...
