Optimal monetary policy and firm entry
Ghent University and IMFS, Goethe University Frankfurt
New Keynesian model with endogenous firm entry, cash-in-advance constraint, preset wages, monopolistic competition in goods and labor markets, and labor requirement for firm startups
intermediate firms: monopolistic competition with Dixit-Stiglitz aggregation; final goods firm: perfect competition
Section 4.4, Flexible wages
Friedman Rule under flexible wages; allocations given by equations 36-38; nominal indeterminacy for price level