A Dynamic New Keynesian Life-Cycle Model: Societal Ageing, Demographics and Monetary Policy

Ippei Fujiwara and Yuki Teranishi

No 07-E-04, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan

Abstract: In this paper, we first construct a dynamic new Keynesian model that incorporates life-cycle behavior a la Gertler (1999), in order to study whether structural shocks to the economy have asymmetric effects on heterogeneous agents, namely workers and retirees. We also examine whether considerations of life-cycle and demographic structure alter the dynamic properties of the monetary business cycle model, specifically the degree of amplification in impulse responses. According to our simulation results, shocks indeed have asymmetric impacts on different households and the demographic structure does alter the size of responses against shocks by changing the degree of the trade-off between substitution and income effects.

Keywords: Heterogenous Agents; Life-Cycle; New Keynesian Model (search for similar items in EconPapers)
JEL-codes: E32 E50 J14 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-env, nep-mac and nep-mon
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Citations: View citations in EconPapers (5)

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Journal Article: A dynamic new Keynesian life-cycle model: Societal aging, demographics, and monetary policy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ime:imedps:07-e-04

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