Full indexation to past inflation

Hello dynare community

I am doing optimal simple rules welfare analysis, in my model I assumed full indexation to past inflation in the calvo problem. Is the full indexing assumption incompatible with rules evaluation? Or what are the implications of full indexation when evaluating monetary policy rules on welfare?


Why should that feature be a problem? Of course, the model in this case will have less to say about the optimal trend inflation rate, because inflation will be neutral in the long-run.

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I am not saying there is a problem, but that you need to defend/justify your assumptions. I think that assumption is very common.