Optimal monetary policy with staggered wage and price contracts
Federal Reserve Board
New Keynesian DSGE model with both staggered nominal wage contracts (Calvo-style) and staggered nominal price contracts (Calvo-style), monopolistic competition in both labor and product markets, production and employment subsidies to eliminate 
monopolistically competitive firms with Cobb-Douglas production; output aggregator combines differentiated goods with Dixit-Stiglitz technology
Optimal monetary policy with staggered wage and price contracts; steady-state inflation indexed, welfare maximization over variances
Authors derive optimal policy as benchmark throughout paper; steady-state inflation is the indexation rate which is treated as given/zero in deviations