Berentsen, Aleksander; Waller, Christopher J. - Federal Reserve Bank of St. Louis - 2009
fully flexible and money is essential for trade. Our main result is that if the central bank pursues a price-level target …, it can control inflation expectations and improve welfare by stabilizing short-run shocks to the economy. The optimal …. In particular, we want to thank Gaudi
Eggertsson and the participants of the Liquidity in Frictional Markets conference …