In the standard new Keynesian framework, an optimizing policy maker does not face
a trade-off between stabilizing the inflation rate and stabilizing the gap between
actual output and output under flexible prices. An ad hoc, exogenous cost-push shock
is typically added to the inflation equation to generate a meaningful policy problem.
In this paper, we show that a cost-push shock arises endogenously when a cost channel
for monetary policy is introduced into the new Keynesian model. A cost channel is
present when firms’ marginal cost depends directly on the nominal rate of interest.
Besides providing empirical evidence for a cost channel, we explore its implications
for optimal monetary policy. We show that its presence alters the optimal policy
problem in important ways. For example, both the output gap and inflation are allowed
to fluctuate in response to productivity and demand shocks under optimal monetary
На сайте ScienceDirect доступна
аннотация статьи, полный текст статьи находится в закрытом доступе