MONETARY POLICY TRANSMISSION IN A MACROECONOMIC AGENT-BASED MODEL

Joeri Schasfoort, Antoine Godin, Dirk Bezemer, Alessandro Caiani and Stephen Kinsella ()
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Dirk Bezemer: Faculty of Economics and Business, University of Groningen, Nettelbosje 2, Groningen, 9747 AE, The Netherlands

Advances in Complex Systems (ACS), 2017, vol. 20, issue 08, 1-35

Abstract: In this paper we explore the variety of monetary policy transmission channels in an agent-based macroeconomic model. We identify eight transmission channels and present a model based on [Caiani et al., J. Econ. Dyn. Contr. 69 (2016) 375–480], extended with an interbank market. We then analyze model simulation results of interest rate shocks in terms of GDP and inflation for four of the transmission channels. We find these effects to be small, in line with the view that monetary policy is a weak tool to control inflation.

Keywords: Agent-based modeling; stock flow consistent modeling; monetary policy transmission; inflation (search for similar items in EconPapers)
Date: 2017
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Working Paper: Monetary Policy Transmission in a Macroeconomic Agent-Based Model (2017)
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DOI: 10.1142/S0219525918500030

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