Heterogeneous Consumers, Demand Regimes, Monetary Policy Efficacy and Determinacy

Giovanni Di Bartolomeo () and Lorenza Rossi ()

Macroeconomics from EconWPA

Abstract: The aim of this paper is to investigate both the efficacy and the stability properties of monetary policy rules in presence of heterogeneous consumers. We aim to underline the link between the well- known Taylor Principle and the demand-policy regimes, defined on the basis of the monetary policy transmission mechanism. By developing an analytical analysis, we show that the transmission mechanism plays a key role on monetary efficacy and equilibrium determinacy.

Keywords: Heterogeneous consumers; liquidity constraints; determinacy; Euler equation. (search for similar items in EconPapers)
JEL-codes: E61 E63 (search for similar items in EconPapers)
Date: Written
Note: Type of Document - pdf; pages: 24
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0508028

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