Optimal Monetary Policy in a Small Open Economy With Habit Persistence
Kyung Hee University
Small open economy New Keynesian model with habit persistence (internal and external) in consumption, Calvo staggered price setting, home bias in consumption, complete international asset markets, and labor income taxation
intermediate firms: monopolistic competition with Calvo pricing; final firms: perfect competition
Table 4 p.19
DPI policy with time-invariant tax, external habit b=0.5, σ=4/3, η=3/4