What Is the Impact of Monetary Policy on Households’ Desired Labor Supply?

Cristiano Cantore, Filippo Ferroni, Haroon Mumtaz and Angeliki Theophilopoulou

Chicago Fed Letter, 2022

Abstract: Do people adjust how much they want to work when the central bank’s monetary policy stance shifts? More specifically, does an interest rate hike induce individuals to work more or fewer hours? And does this effect differ across households with different levels of income (or earnings)? In this article, we discuss our recent research that explores these and related questions. One notable finding is that employed individuals at the bottom of the income distribution want to work more when monetary policy tightens.

Keywords: Macroeconomics; Monetary Economics (search for similar items in EconPapers)
JEL-codes: C10 E32 E52 (search for similar items in EconPapers)
Date: 2022
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