This note shows that full price indexation is not optimal in the long-run in the New Keynesian model. Moreover, we show that more price stickiness may increase steady state welfare, if price indexation is partial.

We combine an estimated monetary policy rule featuring time-varying trend inflation and stochastic coefficients with a medium scale New Keynesian framework calibrated on the U.S. economy. We find the impact of variations in trend inflation on the likelihood of equilibrium determinacy to be both...

This note shows that full price indexation is not optimal in the long-run in the New Keynesian model. Moreover, we show that more price stickiness may increase steady state welfare, if price indexation is partial. -- Indexation ; Optimal Monetary Policy Rules ; New Keynesian model

This paper analyzes consumer inattention in the market of checking accounts. I examine the behavior of consumers who keep account tariffs that are dominated, i.e. that charge higher costs for any amount of bank services consumed through the account, by tariffs available at the same bank and...

This paper provides evidence that, by restoring market functioning, central banks' pandemic-related asset purchase programmes lowered payoff complementarities among investors in corporate bond funds, reinforcing asset managers' willingness to hold riskier assets to increase funds' returns....