The Heterogeneous Effect of Monetary Policy Shocks: Evidence for US Households

Tomás Opazo

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: This paper contributes to the growing research on the heterogeneous effects of monetary policy. Using smooth local projections, we estimate the response of consumption expenditure to monetary policy shocks across different groups of households. Our findings show that the expenditures of older households are more responsive to monetary policy shocks than those of young households, indicating the existence of a life-cycle wealth effect. Moreover, households with a mortgage show larger adjustments compared to outright homeowners, reflecting the influence of their balance sheet composition. Additionally, lower-skilled households exhibit larger consumption responses in comparison to high-skilled households. These findings suggest the relevant influence of the income composition channel, earnings heterogeneity, and balance sheet composition channel in the transmission of monetary policy.

Date: 2023-09
New Economics Papers: this item is included in nep-cba and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bcentral.cl/documents/33528/133326/DTBC_992.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:992

Access Statistics for this paper

More papers in Working Papers Central Bank of Chile from Central Bank of Chile Contact information at EDIRC.
Bibliographic data for series maintained by Alvaro Castillo ().