Monetary Policy and the Drifting Natural Rate of Interest
Sciences Po - OFCE; European Central Bank
New Keynesian model with bonds-in-the-utility function providing liquidity benefits, permanent shocks to productivity growth rate following a bounded unit root process, and time-varying long-run natural rate of interest
monopolistic competition with Calvo-style price rigidities
Table 2 p.12
Unconditional mean under optimal commitment policy with time-varying long-run natural rate
Table 2 reports unconditional means under optimal policy, described as main result in Section 4