The recent surge in inflation led many unions and firms to alter their bargaining and wage-setting policies. Using … during periods of high and low inflation. We find state dependence along the extensive and intensive margins: the average … implications of state-dependent wage setting for the long-run effects of trend inflation, the transmission of monetary policy …

distributive role as well as an allocative role. We exploit this distributive role of prices to explore how concerns for fairness …

Keynesian model we show that, if households have hyperbolic discounting, small positive rates of inflation can be optimal. In … our baseline calibration, the optimal rate of inflation is 2.1% and remains positive across a wide range of calibrations. …