“…The significance of this study is immense as it aims at reconciling various disputes surrounding the aggregate demand policies. First, we seek to reconcile the orthodox belief that monetary policy can serve as a remedy for inflationary control within the new Keynesian framework (Azariadis, 2018;Baxter & King, 1993;Catalano & Pezzolla, 2017;Gelain, Iskrev, Lansing, & Mendicino, 2019;Patrick, Moura, & Pierrard, 2019;Reis, 2018;Vines & Wills, 2018). In particular, the New Keynesian mandates have shown that inflation persistence can act as antidote for growth recovery through output targeting (Blanchard, 2018;Christiano, Eichenbaum & Trabandt, 2018;Cochrane, 2011;Ginters & Buss, 2015;Mankiw & Reis, 2018;Miyamoto, Nguyen & Sergeyev, 2017;Shobande, 2019).…”