Optimal Monetary Policy under Commitment with a Zero Bound on Nominal Interest Rates
CEPR, London, and the European Central Bank (Adam); Federal Reserve Bank of Kansas City (Billi)
Standard New Keynesian model with Calvo price stickiness augmented by an occasionally binding zero lower bound constraint on nominal interest rates; optimal monetary policy under commitment derived via Ramsey approach with recursive Lagrangian 
monopolistic competition with Calvo staggered price setting
Section 6.2 p.1898
Required inflation response to negative 3 s.d. real rate shock under RBC calibration