Phillips Curve Instability and Optimal Monetary Policy

摘要: This paper assesses the implications for optimal discretionary monetary policy if slope of Phillips curve changes. The first derives a from pricing decision monopolistic firm that faces changing cost price adjustment. second aspect constructs utility-based welfare criterion. A novel feature this criterion is has relative weight on output gap deviations changes synchronously with in systematic component targeting rule implements under criteria constant. In contrast, an ad-hoc along curve.