Schmitt-Grohé, Stephanie; Uribe, Martín - C.E.P.R. Discussion Papers - 2005
to fit well postwar US business cycles. We find that mild deflation is Ramsey optimal in the long run. However, the …, mild deflation emerges as a robust Ramsey prediction. In light of the finding that the Ramsey optimal inflation rate is …This paper characterizes Ramsey-optimal monetary policy in a medium-scale macroeconomic model that has been estimated …