Profit Redistribution in a TANK Model with Price and Wage Rigidities: An Analytical Benchmark and an Own-Lag Comparison

Kenji Miyazaki

Papers from arXiv.org

Abstract: This paper studies profit redistribution in a Two-Agent New Keynesian model with price and wage rigidities, type-specific wages, and type-specific labor supply. An aggregate-lag benchmark yields closed-form distributional allocations and impact and infinite-horizon cumulative monetary-policy multipliers. The local effect of the hand-to-mouth share on impact multipliers requires an additional root condition; its local effect on infinite-horizon cumulative multipliers requires determinacy. The own-lag comparison holds primitive cost coefficients fixed rather than equating economic rigidity across timings. Across a grid of policy feedback, household wage-subsidy financing, household shares, and duration targets, expansionary monetary shocks raise output and inflation and lower profits. The hand-to-mouth share increases 21-quarter cumulative responses under both timings and impact responses under own-lag adjustment, whereas the aggregate-lag impact ordering can reverse slightly. Timing changes inflation and profit persistence. The aggregate-lag benchmark compresses dispersion losses into a higher price-inflation weight; own-lag adjustment leaves inherited relative wages and dynamic dispersion terms.

Date: 2025-08, Revised 2026-08
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
https://arxiv.org/pdf/2508.12073 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2508.12073

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().