Hyuk-Jae, Rhee; Song, Jeongseok - In: Journal of East Asian economic integration 18 (2014) 3, pp. 301-335
In this paper, we consider a small open economy under the New Keynesian model with unemployment of Galí (2011a, b) to … unemployment, the optimal policy is to minimize variance of domestic price inflation, wage inflation, and the output gap when both … domestic price and wage are sticky. Second, stabilizing unemployment rate is important in reducing the welfare loss incurred by …