Adão, Bernardino; Correia, Isabel; Teles, Pedro - In: Review of Economic Studies 70 (2003) 4, pp. 699-713
In this paper, we derive principles of optimal cyclical monetary policy in an economy without capital, with a cash-in-advance restriction on household transactions, and monopolistic firms that set prices one period in advance. The only distortionary policy instruments are the nominal interest...
