that nominal wages in the U.S. are downwardly rigid. This paper studies the optimal long-run inflation rate in a labor … monetary policy targets a positive inflation rate; the annual long-run inflation rate for the U.S. is around 2 percent … completely smoothed when prices are fully flexible. Since the optimal long-run inflation rate predicted by this study is …

long-run inflation rate is around 2 percent. Positive inflation in this environment “greases the wheels” of the labor …, particularly those of large sizes. Finally, the optimal long-run inflation rate predicted by this study is considerably higher than …