Monetary policy and distribution

Stephen Williamson

Journal of Monetary Economics, 2008, vol. 55, issue 6, 1038-1053

Abstract: A segmented markets model of monetary policy is constructed, in which a novel feature is goods market segmentation, and its relationship to conventional asset market segmentation. The implications of the model for the response of prices, interest rates, consumption, labor supply, and output to monetary policy are determined. As well, optimal monetary policy is studied, as are the costs of inflation. The model features persistent nonneutralities of money, relative price effects of increases in the money supply, persistent liquidity effects, and a negative Fisher effect from a money supply increase. A Friedman rule is in general suboptimal.

Keywords: Monetary; policy; Segmented; markets (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (63)

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Working Paper: Monetary Policy and Distribution (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:55:y:2008:i:6:p:1038-1053

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