ABSTRACT. Barseghyan and DiCecio think that if sticky-prices firms are allowed to pay menu costs to reoptimize, such costs have to be implausibly high to support multiple equilibria. Carlsson and Westermark study the implications for monetary policy in situations where declining nominal wages are not a viable margin for adjustment to adverse economic conditions. Gavin et al. show that the optimal monetary policies recommended by New Keynesian models still imply a large amount of inflation risk: when the monetary policy rules are modified to include some weight on a price path, the economy achieves equilibria with substantially lower long-run inflation risk.



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