Monetary policy when wages are downwardly rigid: Friedman meets Tobin
Korea University; University of Montreal
New Keynesian DSGE model with asymmetric (linex) nominal wage adjustment costs capturing downward nominal wage rigidity, Rotemberg quadratic price adjustment costs, and transaction cost function for money demand
intermediate firms: monopolistic competition with differentiated goods; final firms: aggregate consumption bundle
Section 4.1 p.2073
Ramsey optimal policy with quadratic (symmetric) wage adjustment costs