Optimal Monetary Policy with Nominal Rigidities and Lumpy Investment
Journal article, Peer reviewed
MetadataShow full item record
Original versionThe International Journal of Central Banking. 2017, 13 (4), 35-62.
New Keynesian theory generally abstracts from the lumpy nature of plant-level investment. Given the prominent role of investment spending for shaping optimal monetary policy, this simplification could be problematic. Our analysis suggests, however, that this is not the case in the context of a New Keynesian model featuring lumpy investment `a la Sveen and Weinke (2007).
This is an Open Access journal available from www.ijcb.org