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Guido Ascari and Nicola Branzoli
''The long-run optimal degree of indexation in new Keynesian models with price staggering à la Calvo''
( 2010, Vol. 30 No.1 )
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
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
Manuscript Received : Sep 10 2009 Manuscript Accepted : Feb 08 2010

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