liquidity constraints of agents on one hand, and increasing potential inflation risk and distorting the portfolio choices of …

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 …. -- inflation targeting ; monetary policy ; nominal inertia ; optimal monetary policy ; Phillips curve and unemployment …

Phillips curve. -- Efficiency wages ; money growth ; Phillips curve ; inflation …

money illusion affects the short-run effects of a monetary shock. -- Phillips curve ; inflation ; nominal inertia ; monetary …

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 …. -- optimal monetary policy ; inflation targeting ; unemployment ; Phillips curve ; nominal inertia ; monetary policy …

and inflation in these models through a real interest rate channel is shown to be misguided. A decline in output and … inflation is consistent with a decline, increase, or no change in the real interest rate. The expected path of Taylor rule … shocks and the New-Keynesian Phillips Curve are key for inflation and output; the real rate largely reflects consumption …