We determine optimal monetary policy under commitment in a forward-

Non-technical summary 1 Introduction 2 A simple Lucas-type model 2.1 Central bank objective function 2.2 Time-line 3 Optimal policy in two benchmark settings 3.1 Benchmark I: Perfectly observable shocks 3.2 Benchmark II: Unobservable shocks 4 Imperfect common knowledge and information channels 4.1 The real-valued Gaussian channel 5 Rational expectations equilibrium with imperfect common knowledge 5.1 Price setting with imperfect common knowledge 5.2 REE and optimal information structure 6 Optimal stabilization policy 6.1 The baseline case 6.2 Uncertainty about the degree of information frictions 6.3 Persistent markup shocks 6.4 Strategic substitutes 7 Conclusions A Appendix References European Central Bank working paper series ECB Working Paper No