PRESENT BIAS AMPLIFIES THE HOUSEHOLD BALANCE-SHEET CHANNELS OF MACROECONOMIC POLICY

• 成果类型: Article
• 署名作者: Maxted, Peter; Laibson, David; Moll, Benjamin
• 署名单位: University of California System; University of California Berkeley; Harvard University; University of London; London School Economics & Political Science
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjae026
• 发表日期: 2024
• 页码: 691-743
• 关键词: monetary-policy; Mortgage market; interest-rates; debt; equity; liquidity; prices; savings; MODEL; HOME

摘要

We study the effect of monetary and fiscal policy in a heterogeneous-agent model where households have present-biased time preferences and naive beliefs. The model features a liquid asset and illiquid home equity, which households can use as collateral for borrowing. Because present bias substantially increases households' marginal propensity to consume (MPC), present bias increases the effect of fiscal policy. Present bias also amplifies the effect of monetary policy, but at the same time, slows down the speed of monetary transmission. Interest rate cuts incentivize households to conduct cash-out refinances, which become targeted liquidity injections to high-MPC households. Present bias also introduces a motive for households to procrastinate refinancing their mortgages, which slows down the speed with which this monetary channel operates.