Purpose – The objective of this work is to develop a model that can be used for simulation of different parameters including price, subjected to different control strategies. Design/methodology/approach – The entire supply chain can be modelled by combining the transfer function into a...

We present determinacy bounds on monetary policy in the sticky information model. We find that these bounds are more conservative here when the long run Phillips curve is vertical than in the standard Calvo sticky price New Keynesian model. Specifically, the Taylor principle is now necessary...