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MoNK: Mortgages in a New-Keynesian model

Carlos Garriga (), Finn E. Kydland and Roman Šustek

Journal of Economic Dynamics and Control, 2021, vol. 123, issue C

Abstract: There has been much interest recently in the role of household long-term, mortgage, debt in the transmission of monetary policy. This paper offers a tractable framework that integrates the long-term debt channel with the standard New-Keynesian channel, providing a tool for monetary policy analysis that reflects the recent debates in the literature. As there is a nontrivial role in the model for both short- and long-term debt, it provides a laboratory to investigate the effects of monetary policy operating not only through its current short-term actions but also through expected, persistent, changes in its stance.

Keywords: Long-term mortgage debt; Household balance sheets; Cash-flow effects; Sticky prices; Monetary policy transmission (search for similar items in EconPapers)
JEL-codes: E52 G21 R21 (search for similar items in EconPapers)
Date: 2021
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Working Paper: MoNK: Mortgages in a New-Keynesian Model (2019) Downloads
Working Paper: MoNK: Mortgages in a New-Keynesian Model (2019) Downloads
Working Paper: MoNK: Mortgages in a New-Keynesian Model (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:123:y:2021:i:c:s016518892030227x

DOI: 10.1016/j.jedc.2020.104059

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Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

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