multiplicity is a form of policy complementarity. Specifically, prices set in the current period embed expectations about future … policy, and actual future policy responds to these same prices. For a range of values of the fundamental state variable — a … ratio of predetermined prices — there is complementarity between actual and expected policy, and multiple equilibria occur …

preliminary conclusions. Equity prices are a misleading guide for interest rate policy. Monetary policy tactics protect market …

In simple sticky-price models, the guiding principle for optimal monetary policy is to stabilize nominal prices so as … consumption goods, then stabilizing nominal prices means making the inflation rate zero. A growing subliterature on sticky prices … considers optimal monetary policy when there are multiple sectors of sticky-price goods, broadly defined. If the relative prices …