The article discusses how imperfections in credit markets can impact monetary policy. The researchers show that asset prices can affect the economy by changing how efficiently labor and capital are used. They find that after a productivity shock, there is a trade-off between immediate output loss and future output loss due to resource reallocation. By temporarily increasing inflation after a shock, the negative effects of resource reallocation can be reduced. The study suggests that some inflation variability is optimal for monetary policy, even with only productivity shocks in the economy.