Endogenous price rigidity eliminates high inflation equilibrium in monetary policy.
The study looks at how a country's monetary policy can stay consistent over time when prices are slow to change. They find that when companies can adjust prices more easily in response to inflation, there is only one stable inflation rate that the government can aim for. This is different from previous studies that found two stable inflation rates. The key factors are the cost of changing prices and a small cost of inflation that doesn't depend on how rigid prices are.