We analyze monetary policy in a New Keynesian model with durable and non-durable goods each with a separate degree of price rigidity. The model behavior is governed by two New Keynesian Phillips Curves. If durable goods are sufficiently long-lived we obtain an intriguing variant of the...

Markets for durable goods constitute an important part of the economy. In this paper I first briefly review the microeconomic theory literature on durable-goods markets, focusing mostly on the last ten years. I then discuss a number of my own recent analyses concerning optimal antitrust policy...