Cyclical Inequality in the Cost of Living and Implications for Monetary Policy

• 成果类型: Article
• 署名作者: Lan, Ting; Li, Lerong; Li, Minghao
• 署名单位: International Monetary Fund; University of International Business & Economics; Peking University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.70053
• 发表日期: 2026
• 关键词: responses; prices; wage

摘要

This paper documents that households with higher marginal propensities to consume (MPCs) consume goods with more flexible prices. Consequently, they face more cyclical and volatile inflation, and experience higher inflation following expansionary monetary policy shocks. We embed this MPC-price stickiness relationship into a tractable multi-sector two-agent New Keynesian (TANK) model and show that it dampens monetary policy effectiveness by about 15% relative to a homogeneous-basket benchmark. Introducing heterogeneous consumption baskets also generates an inefficient flexible-price equilibrium, leading to a novel trade-off between stabilization and redistribution, which alters the optimal monetary policy prescription.