On the Welfare and Cyclical Implications of Moderate Trend Inflation
University of Oxford and Pavia; University of Quebec at Montreal; University of Notre Dame and NBER
Medium-scale New Keynesian DSGE with Calvo wage and price contracts, habit formation, investment adjustment costs, variable capital utilization, roundabout production structure, extended working capital channel, trend growth in neutral and inve
intermediate firms: monopolistic competition with Calvo pricing; final good firm: perfect competition; labor packer: perfect competition
Table 4 p.16
Less persistent MEI shock (rho_I = 0.66)