Inventories and Optimal Monetary Policy
Federal Reserve Bank of Richmond; National Taiwan University
New Keynesian DSGE model augmented with inventories that facilitate sales following Bils and Kahn (2000), where inventory stock enters the Dixit-Stiglitz aggregator and affects firm demand
monopolistic competition with quadratic price adjustment costs, inventories facilitate sales
Table 3 (Table 5) Panel B p.18
Ramsey policy with inventories, alternative calibration δ=0.05