Optimal inflation with corporate taxation and financial constraints
Sveriges Riksbank; Bank for International Settlements; European Central Bank; Université Libre de Bruxelles – SBSEM and ECARES, and CEPR
DSGE model with corporate taxation featuring deductibility of interest payments and investment expenditures, combined with collateral constraints à la Kiyotaki-Moore where firms use capital as collateral for borrowing
intermediate firms: use capital and labor with Cobb-Douglas technology, face credit constraints; final firms: buy intermediate inputs in competitive market, face Rotemberg price adjustment costs in sticky price version
Table 4, p.26
No monopolistic distortion, 3 months price adjustment frequency