We introduce inventories into an otherwise standard New Keynesian model and study the implications for inflation … equivalent to the standard model with respect to the behavior of inflation when the model's cross-equation restrictions are … explaining inflation dynamics within our New Keynesian Phillips curve framework …

a model without inventories, Ramsey-optimal monetary policy in a model with inventories deviates from complete inflation …

in order to stabilize inflation. It follows that in response to higher nominal wage rigidity, it is optimal to allow for … smaller fluctuations of unemployment at the expense of larger inflation fluctuations …

complete inflation stabilization, but the welfare differences are minor. Moreover, we also find in line with the existing …

output and real-rate gaps can be represented in a parsimonious and practical manner using the theory of anelasticity that …