Lumpy Durable Consumption Demand and the Limited Ammunition of Monetary Policy

• 成果类型: Article
• 署名作者: Mckay, Alisdair; Wieland, Johannes F.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; University of California System; University of California San Diego; National Bureau of Economic Research
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA18821
• 发表日期: 2021
• 页码: 2717-2749
• 关键词: investment tax incentives; menu costs; price; US; transmission; INFORMATION; liquidity; models; shocks

摘要

The prevailing neo-Wicksellian view holds that the central bank's objective is to track the natural rate of interest (r*), which itself is largely exogenous to monetary policy. We challenge this view using a fixed-cost model of durable consumption demand, in which expansionary monetary policy prompts households to accelerate purchases of durable goods. This yields an intertemporal trade-off in aggregate demand as encouraging households to increase durable holdings today leaves fewer households acquiring durables going forward. Interest rates must be kept low to support demand going forward, so accommodative monetary policy today reduces r* in the future. We show that this mechanism is quantitatively important in explaining the persistently low level of real interest rates and r* after the Great Recession.