Consumer Durables and Monetary Policy According to HANK

Emil Holst Partsch, Ivan Petrella and Emiliano Santoro

No 20083, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Durables’ interest-rate sensitivity and their persistent comovement with nondurable spending are hallmarks of monetary policy transmission. We develop a two-sector HANK model that replicates this pattern—both across spending categories and among households sorted by liquid asset holdings, consistent with empirical evidence. Direct effects of real interest rate changes are quantitatively important in reproducing sectoral expenditure comovement, while infrequent information updating is crucial to match the hump-shaped dynamics of sectoral and aggregate expenditures. Income effects are essential to preventing counterfactual declines in nondurable spending resulting from fiscal interventions specifically aimed at stimulating durable purchases.

Keywords: Durable goods; sectoral comovement; Monetary policy; Hank (search for similar items in EconPapers)
JEL-codes: E21 E31 E40 E44 E52 (search for similar items in EconPapers)
Date: 2025-03
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP20083 (application/pdf)

Related works:
Journal Article: Consumer durables and monetary policy according to HANK (2026)
Working Paper: Consumer Durables and Monetary Policy According to HANK (2025)
Working Paper: Consumer durables and monetary policy according to HANK (2025)
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:cpr:ceprdp:20083

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP20083

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().