MONETARY POLICY AND INEQUALITY: HOW DOES ONE AFFECT THE OTHER?

• 成果类型: Article
• 署名作者: Ma, Eunseong
• 署名单位: Yonsei University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12610
• 发表日期: 2023
• 页码: 691-725
• 关键词: heterogeneous consumers; shocks; transmission; IMPACT; RISK; aggregation; propagation; multipliers; MARKETS; income

摘要

This article studies a labor-supply-side channel affecting the relationship between monetary policy and income inequality. To this end, I build a heterogeneous-agent New Keynesian economy with indivisible labor in which both macro and micro labor supply elasticities are endogenously generated. First, I find that monetary policy shocks have distributional consequences due to a substantial heterogeneity in labor supply elasticity across households. Second, a more equal economy is associated with more effective monetary policy in terms of output. I document supporting empirical evidence for the key mechanism of the model using microlevel data and state-level data in the United States.