The Supply-Side Effects of Monetary Policy

• 成果类型: Article
• 署名作者: Baqaee, David R.; Farhi, Emmanuel; Sangani, Kunal
• 署名单位: University of California System; University of California Los Angeles; Harvard University
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/727287
• 发表日期: 2024
• 页码: 1065-1112
• 关键词: shocks; PRODUCTIVITY; prices; inflation; QUALITY; TRADE; micro

摘要

We propose a supply-side channel for the transmission of monetary policy. We show that when high-markup firms have lower pass-throughs than low-markup firms, then positive demand shocks, such as monetary expansions, alleviate cross-sectional misallocation by reallocating resources to high-markup firms. Consequently, positive demand shocks are accompanied by endogenous positive supply shocks that raise productivity and lower inflation. We derive a tractable, four-equation model where monetary shocks generate hump-shaped productivity responses. In our calibration, the supply-side effect amplifies the total impact of monetary shocks on output by about 70%. We provide empirical evidence validating our model's predictions using identified monetary shocks.