11.2. Consider a discrete-time model where prices are completely unresponsive to unanticipated monetary shocks for one period and completely flexible thereafter. Suppose the IS equation is y = c − ar and that the condition for equilibrium in the money market is m − p = b + hy − ki. Here y, m, and p are the logs of output, the money supply, and the price level; r is the real interest rate; i is the nominal interest rate; and

a, h, and k are positive parameters.

Assume that initially m is constant at some level, which we normalize to zero, and that y is constant at its flexible-price level, which we also normal