Active vs. passive policy and the trade-off between output and inflation in HANK

• 成果类型: Article
• 署名作者: Kwicklis, Noah
• 署名单位: University of California System; University of California Los Angeles
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2025.103732
• 发表日期: 2025
• 关键词: Fiscal theory; Heterogeneity; inflation; HANK

摘要

When fiscal policy is active and monetary policy is passive in a heterogeneous agent New Keynesian (HANK) model, deficit-financed transfers to low-asset households lead to similar cumulative inflation but greater increases in real output than transfers to wealthier households. I use the inverse of the Phillips multiplier, the price level sacrifice ratio, to quantify this dynamic. Household heterogeneity and targeted policy change the timing of output gaps, making this consistent with the Phillips Curve and rendering conventional sacrifice ratio intuition misleading for assessing the inflation/output trade-off between policies.