@article{Stability:1425,
      recid = {1425},
      author = {Kryvtsov, Oleksiy and Shukayev, Malik and Ueberfeldt,  Alexander},
      title = {Optimal Monetary Policy and Price Stability Over the  Long-Run},
      publisher = {Bank of Canada},
      address = {2007},
      pages = {1 online resource (iii, 42 pages)},
      abstract = {This paper examines the role of monetary policy in an  environment with aggregate risk and incomplete markets. In  a two-period overlapping-generations model with aggregate  uncertainty and nominal bonds, optimal monetary policy  attains the ex-ante Pareto optimal allocation. This policy  aims to stabilize the savings rate in the economy via the  effect of expected inflation on real returns of nominal  bonds. The equilibrium under optimal monetary policy is  characterized by positive average inflation and a  nonstationary price level. In an application a key finding  is that optimal monetary policy combines features of  inflation and price-level targeting.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/1425},
      doi = {https://doi.org/10.34989/swp-2007-26},
}