Application for Monetary Policy 2 One can easily find that time inconsistency in our first model lies in the phillips curve . However, the microfoundation of the phillips curve again lies in the heterogeneity of interests everyone hopes others to underforecast inflation &So, the phillips curve and consequently the time inconsistency problem no longer 9 exist in communist world 复9大学 To conclude, time inconsistency seems to be a general outcome from the world with heterogeneous interestsApplication for Monetary Policy ❖ One can easily find that time inconsistency in our first model lies in the Phillips Curve. ❖ However, the microfoundation of the Phillips Curve again lies in the heterogeneity of interests: everyone hopes others to underforecast inflation. ❖ So, the Phillips Curve and consequently the time inconsistency problem no longer exist in a “communist world”. ❖ To conclude, time inconsistency seems to be a general outcome from the world with heterogeneous interests