Barseghyan, Levon (contributor); … - 2005 - rev.
�ation is costly independently of the
degree of price rigidity.
4
growth rate is denoted by x and the corresponding policy rule … by X(Pe).
The state of the economy, after the monetary authority decision and the
realization of the policy, shock is (Pe;x …).
2.2 Households
The representative household solves the following problem:
max
+1X
t=0
tu(ct;nt); 0 < < 1; > 0; > 0 …