Heterogeneous consumers, demand regimes, monetary policy and equilibrium determinacy
Giovanni Di Bartolomeo () and
Lorenza Rossi ()
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This paper investigates the effects of monetary policy in presence of heterogeneous consumers. We study the effectiveness (quantitative effects) of monetary policy and equilibrium determinacy properties of a New Keynesian DSGE model where a fraction of households cannot smooth consumption. We show that two-demand regimes can emerge (according to the “slope” of IS curve) and that the main unconventional results, stressed by recent literature, only hold in the unconventional case of an IS curve positively sloped.
Keywords: Heterogeneous consumers; liquidity constraints; determinacy; demand regimes (search for similar items in EconPapers)
JEL-codes: E61 E63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Journal Article: Heterogeneous Consumers, Demand Regimes, Monetary Policy and Equilibrium Determinacy (2007)
Working Paper: Heterogeneous Consumers, Demand Regimes, Monetary Policy and Equilibrium Determinacy (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ter:wpaper:0024
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