Monetary Policy According to HANK

• 成果类型: Article
• 署名作者: Kaplan, Greg; Moll, Benjamin; Violante, Giovanni L.
• 署名单位: University of Chicago; National Bureau of Economic Research; Princeton University; Center for Economic & Policy Research (CEPR)
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20160042
• 发表日期: 2018
• 页码: 697-743
• 关键词: economic stimulus payments; consumption response; aggregate demand; interest-rates; income; prices; PARTICIPATION; elasticity; rigidities; inflation

摘要

We revisit the transmission mechanism from monetary policy to household consumption in a Heterogeneous Agent New Keynesian (HANK) model. The model yields empirically realistic distributions of wealth and marginal propensities to consume because of two features: uninsurable income shocks and multiple assets with different degrees of liquidity and different returns. In this environment, the indirect effects of an unexpected cut in interest rates, which operate through a general equilibrium increase in labor demand, far outweigh direct effects such as intertemporal substitution. This finding is in stark contrast to small- and medium-scale Representative Agent New Keynesian (RANK) economies, where the substitution channel drives virtually all of the transmission from interest rates to consumption. Failure of Ricardian equivalence implies that, in HANK models, the fiscal reaction to the monetary expansion is a key determinant of the overall size of the macroeconomic response.