The comeback of inflation as an optimal public finance tool
University of Milan-Bicocca
New Keynesian DSGE with Rotemberg price adjustment costs, distortionary taxation, public consumption, public transfers, and government debt; Ramsey optimal monetary and fiscal policy
intermediate firms: monopolistic competition with Rotemberg adjustment costs; final firms: perfect competition
Figure 1 Panel (a) p.3
Optimal Ramsey inflation with public consumption at 30% of output