The article explores how the best monetary policy should respond to changes in productivity growth. By using a model where people are unsure about how long productivity changes will last, the study shows that after a productivity boost, costs and inflation decrease. This matches real-world data and common beliefs. The model also accurately reflects how the economy reacts to productivity changes. The study suggests that when productivity goes up, wages should rise and prices should fall, depending on how quickly prices adjust. Overall, the research supports the idea that the Federal Reserve made the right moves in response to the productivity increase in the late 1990s.