Consumer Durables and Monetary Policy According to HANK

Emil Holst Partsch, Ivan Petrella and Emiliano Santoro

Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: Durable and nondurable consumption comovement is central to monetary policy trans mission. Using a two-sector Heterogeneous Agent New Keynesian model, we generate re alistic sectoral comovement while capturing key household spending patterns. Both direct and indirect effects matter: intertemporal substitution strongly influences durable spend ing, while income effects drive persistence in nondurable responses. Comovement also extends to households sorted by liquid asset holdings. Distinguishing transmission chan nels is crucial for understanding the macroeconomic impact of targeted fiscal policies, as subsidies for durable goods purchases.

Keywords: Durable goods; sectoral comovement; monetary policy; HANK (search for similar items in EconPapers)
Pages: 54 pages
Date: 2025
New Economics Papers: this item is included in nep-cba, nep-dge and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:736

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