Intensive and Extensive Margins of Labor Supply in HANK: Aggregate and Disaggregate Implications

Eunseong Ma

Journal of Money, Credit and Banking, 2025, vol. 57, issue 6, 1657-1683

Abstract: This paper studies how adjustment along intensive and extensive margins of labor supply affects aggregate and disaggregate effects of monetary policy. To this end, I develop a heterogeneous‐agent New Keynesian (HANK) economy where a nonlinear mapping from hours worked into labor services generates operative adjustment along intensive and extensive margins of labor supply. I find that monetary policy has significantly different effects on earnings inequality, depending on the extent to which margin is dominant, even if it generates similar aggregate responses.

Date: 2025
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https://doi.org/10.1111/jmcb.13141

Related works:
Working Paper: Intensive and Extensive Margins of Labor Supply in HANK: Aggaregate and Disaggregate Implications (2022)
Working Paper: Intensive and Extensive Margins of Labor Supply in HANK: Aggregate and Disaggregate Implications (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:57:y:2025:i:6:p:1657-1683

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