This paper serves two purposes. First, it provides estimates of an optimisation-based equilibrium model with sticky prices and wages. Second, the estimated model is used to analyse the welfare properties of various interest rate rules for conducting monetary policy. As shown by Erceg et al...

Foreword / Esther L. George -- Introduction / Jonathan L. Willis -- The moderators - James Poterba, Erica L. Groshen -- Customer markets and financial frictions: implications for inflation dynamics / Simon Gilchrist, Egon Zakrajšek -- Commentary / Peter J. Klenow -- The international price...