Microeconomics of consumer theory -- Consumer analysis, firm analysis, fiscal policy, introduction to finance theory -- Static consumption-labor framework -- Dynamic consumption-savings framework -- Inflation and interest rates in the consumption-savings framework -- Dynamic consumption-labor...

Costly nominal wage adjustment has received renewed attention in the design of optimal policy. In this paper, we embed costly nominal wage adjustment into the modern theory of frictional labor markets to study optimal fiscal and monetary policy. Our main result is that the optimal rate of price...