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Olivier Blanchard makes the point that stabilizing inflation is not, in general, the same as stabilizing real output through monetary policy.1 The divine coincidence between these two goals that Goodfriend and King (1997) derived under the condition of temporary nominal price rigidity as described in the staggered contracts model devised by Calvo (1983) breaks down if there is a downward rigidity of real wages. There is thus a trade-off between inflation and output stabilization that involves more difficult monetary policy decisions.