The long-run optimal degree of indexation in new Keynesian models with price staggering à la Calvo

Guido Ascari and Nicola Branzoli

Economics Bulletin, 2010, vol. 30, issue 1, 482-493

Abstract: This note shows that full price indexation is not optimal in the long-run, in the New Keynesian model under trend inflation and price staggering à la Calvo. Moreover, we show that more price stickiness may increase steady state welfare, if price indexation is partial.

Keywords: Indexation; Trend Inflation; New Keynesian model (search for similar items in EconPapers)
JEL-codes: E3 E5 (search for similar items in EconPapers)
Date: 2010-02-08
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Citations: View citations in EconPapers (2)

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