US financial shocks and the distribution of income and consumption in the UK

Haroon Mumtaz and Konstantinos Theodoridis

No E2017/18, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: We show that US financial shocks have an impact on the distribution of UK income and consumption. Households with higher income and higher levels of consumption are affected more by this shock than households located towards the lower end of these distributions. An estimated multiple agent DSGE model suggests that the heterogeneity in the household responses can be explained by the different levels of access to financial markets. We find that this heterogeneity magnifies the effect of this shock on aggregate output.

Keywords: FAVAR; DSGE model; Financial Shock (search for similar items in EconPapers)
JEL-codes: D31 E32 E44 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2017-12
New Economics Papers: this item is included in nep-cmp, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: US financial shocks and the distribution of income and consumption in the UK (2017)
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