Correction to: Optimal Monetary Policy and Financial Stability in a Non-Ricardian Economy.

This document is a correction to an article by Salvatore Nisticò, addressing an error in the welfare criterion derivation. The error does not affect the theoretical results, and updated numerical results and sensitivity analysis are provided. The document explains the two layers of heterogeneity in the model and discusses the welfare effects of cross-sectional dispersion. It also provides a corrigendum for equations in a previous paper by the same author. The numerical analysis shows that the revised welfare criterion has a marginal effect and strengthens the insights of the paper. The document evaluates different policy regimes and their implications in terms of cyclical and welfare properties, highlighting the importance of considering financial-wealth effects in monetary policy design. The results demonstrate that ignoring financial instability leads to higher welfare losses, and the total welfare costs of ignoring financial-wealth effects are substantial. The sensitivity analysis confirms these findings. [Extracted from the article]