Monetary Policy and the Redistribution Channel
Adrien Auclert ()
No 23451, NBER Working Papers from National Bureau of Economic Research, Inc
This paper evaluates the role of redistribution in the transmission mechanism of monetary policy to consumption. Three channels affect aggregate spending when winners and losers have different marginal propensities to consume: an earnings heterogeneity channel from unequal income gains, a Fisher channel from unexpected inflation, and an interest rate exposure channel from real interest rate changes. Sufficient statistics from Italian and U.S. data suggest that all three channels are likely to amplify the effects of monetary policy. A standard incomplete markets model can deliver the empirical magnitudes if assets have plausibly high durations but a counterfactual degree of inflation indexation.
JEL-codes: D31 D52 E21 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-dcm, nep-dge, nep-mac and nep-mon
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Published as Adrien Auclert, 2019. "Monetary Policy and the Redistribution Channel," American Economic Review, vol 109(6), pages 2333-2367.
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Journal Article: Monetary Policy and the Redistribution Channel (2019)
Working Paper: Monetary Policy and the Redistribution Channel (2017)
Working Paper: Monetary Policy and the Redistribution Channel (2015)
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