Intensive and Extensive Margins of Labor Supply in HANK: Aggaregate and Disaggregate Implications

Eunseong Ma

No 2022rwp-202, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: This paper studies how adjustment along intensive and extensive margins of labor supply affects aggregate and disaggregate effects of monetary policy. To this end, I develop a heterogeneous-agent New Keynesian (HANK) economy where a nonlinear mapping from hours worked into labor services generates operative adjustment along intensive and extensive margins of labor supply. I find that monetary policy has significantly different effects on earnings inequality, depending on the extent to which margin is dominant, even if it generates similar aggregate responses.

Keywords: Monetary policy; Intensive and extensive margins; Earnings inequality. (search for similar items in EconPapers)
JEL-codes: D31 D52 E52 J21 (search for similar items in EconPapers)
Pages: 30pages
Date: 2022-09
New Economics Papers: this item is included in nep-cba, nep-dge and nep-lma
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Intensive and Extensive Margins of Labor Supply in HANK: Aggregate and Disaggregate Implications (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:yon:wpaper:2022rwp-202

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