McCallum, Bennett T. - 2011
Should central banks, because of the zero-lower-bound problem, raise their inflation-rate targets? Several arguments … are relevant. (1) In the absence of the ZLB, the optimal steady-state inflation rate, according to standard New Keynesian … reasoning, lies between the Friedman-rule value of deflation at the steady-state real interest rate and the Calvo-model value of …