Unconventional Monetary Policy According to HANK

Eric Sims (), Jing Cynthia Wu and Ji Zhang

No 30329, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies the implications of household heterogeneity for the effectiveness of quantitative easing (QE). We consider a heterogeneous agent New Keynesian (HANK) model with uninsurable household income risk. Financial intermediaries are subject to an endogenous leverage constraint that allows QE to matter. We find that macro aggregates react very similarly to a QE shock in the HANK model compared to a representative agent (RANK) version of the model. This finding is robust across different micro- and macro- distributions of wealth.

JEL-codes: E12 E52 (search for similar items in EconPapers)
Date: 2022-08
New Economics Papers: this item is included in nep-ban, nep-cba, nep-dge and nep-mon
Note: EFG ME
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Citations: View citations in EconPapers (10)

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