complementarities in price setting delivers a strictly positive optimal inflation in steady state, differently from standard New … inflation curbs the markups, especially those of the more productive firms, hence attenuating the inefficient dispersion of … markups. At low levels of inflation, the gains from the reduction in misallocation outweigh the cost of inflation …

. Aggregating the model in closed form, we show that it delivers radically different predictions for the optimal inflation rate than … canonical sticky price models featuring homogenous firms: (1) the optimal steady-state inflation rate generically differs from … zero and (2) inflation optimally responds to productivity disturbances. Using micro data from the US Census Bureau to …

different predictions for the optimal inflation rate than their popular homogenous-firm counterparts: (1) the optimal steady …-state inflation rate generically differs from zero and (2) inflation optimally responds to productivity disturbances. We show this by … estimate the historically optimal inflation path for the U.S. economy. In the year 1977, the optimal inflation rate stood at 1 …

. Aggregating the model in closed form, we show that it delivers radically different predictions for the optimal inflation rate than … canonical sticky price models featuring homogenous Firms: (1) the optimal steady-state inflation rate generically differs from … zero and, (2) inflation optimally responds to productivity disturbances. Using micro data from the US Census Bureau to …

complementarities in price setting delivers a strictly positive optimal inflation in steady state, differently from standard New … inflation curbs the markups, especially those of the more productive firms, hence attenuating the inefficient dispersion of … markups. At low levels of inflation, the gains from the reduction in misallocation outweigh the cost of inflation …

Many central banks worldwide announce numerical inflation targets, typically ranging from zero to two percent in … advanced economies and higher in developing countries. Historically, a significant gap existed between the inflation targets … for zero or negative inflation targets and surveys new forces justifying positive targets. Key factors include (i) trends …

level and the dynamics of inflation. I compare the model's predictions with those of a perfectly competitive, flexible price … rigidity delivers an extremely close approximation both of the price/unit labor cost ratio and of the inflation series, even …

. Aggregating the model in closed form, we show that it delivers radically different predictions for the optimal inflation rate than … canonical sticky price models featuring homogenous firms: (1) the optimal steady-state inflation rate generically differs from … zero and (2) inflation optimally responds to productivity disturbances. Using micro data from the US Census Bureau to …