Trend inflation, wage and price rigidities, and productivity growth
Bank of Canada; Université Laval
Erceg et al. (2000) model extended to account for non-zero trend inflation and steady-state real per capita output growth with Taylor-style staggered nominal price and wage contracts
intermediate firms: monopolistic competition with Taylor staggered price contracts; final firms: perfect competition with CES aggregation
Table 1 p.362
Lower elasticity in labour market (theta=4)