Kapadia, Sujit (contributor) - 2005
that the natural rate of output sluggishly adjusts towards
current output. We also assume that the natural rate has an … natural rate is low. Our model also offers a new explanation for
in ation persistence.
Keywords: Monetary Policy, Hysteresis … between unemployment and output carries over to hysteresis in these vari-
ables). Speci cally, we assume that the natural rate …