The long-run optimal degree of indexation in new Keynesian models with price staggering à la Calvo

This note shows that full price indexation is not optimal in the long-run, in the New Keynesian model under trend inflation and price staggering à la Calvo. Moreover, we show that more price stickiness may increase steady state welfare, if price indexation is partial.

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Year of publication:	2010
Authors:	Ascari, Guido ; Branzoli, Nicola
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 30.2010, 1, p. 482-493
Publisher:	AccessEcon
Subject:	Indexation \| Trend Inflation \| New Keynesian model

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; E3 - Prices, Business Fluctuations, and Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008562994