Corona Policy According to HANK

Marcus Hagedorn and Kurt Mitman

No 14694, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this note, we analyze the role of the European Central Bank through the lens of the Heterogenous-agent New Keynesian Model (HANK), a new paradigm of fiscal and monetary policy that abandons the assumption of perfectly functioning financial markets. We emphasize three principles that emerge from this view: 1) the effect of fiscal and monetary financing on inflation; 2) the close interaction between fiscal and monetary policy in the determination of inflation; and 3) an economic perspective on Art.123(1) TFEU, the “prohibition of monetary financing.â€

Keywords: Hank; Monetary financing; inflation; Art.123(1) tfeu; Fiscal/monetary policy interaction (search for similar items in EconPapers)
JEL-codes: D52 E31 E52 E62 E63 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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