Consumption heterogeneity and monetary policy in an open economy

• 成果类型: Article
• 署名作者: Chen, Sihao; Devereux, Michael B.; Shi, Kang; Xu, Juanyi
• 署名单位: Fudan University; Fudan University; University of British Columbia; Chinese University of Hong Kong; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2023.07.001
• 发表日期: 2023
• 页码: 1-15
• 关键词: Tank model; monetary policy; PCP; LCP; Consumption heterogeneity

摘要

We incorporate two types of agents (Ricardian versus Keynesian) into a standard open economy macro model. We find that consumption heterogeneity has major implications for the impact of monetary policy shocks, the international transmission mechanism, and the design of optimal monetary policy. With sticky prices, the existence of Keynesian agents causes a spillover of shocks across countries, and leads to the interdependence of optimal monetary targeting rules. In the case of local currency pricing, consumer heterogeneity leads an optimal monetary policy to generate currency misalignment and deviations from the law of one price. Theoretically, there are ranges of household heterogeneity in which monetary policy becomes ineffective, but this depends sensitively on the interaction of aggregate demand and relative price effects.