Intergenerational redistributive effects of monetary policy

Marcin Bielecki, Michal Brzoza-Brzezina and Marcin Kolasa

No 2021-03, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: This paper investigates the distributional consequences of monetary policy across generations. We use a life-cycle model with a rich asset structure as well as nominal and real rigidities calibrated to the euro area using both macroeconomic aggregates and microeconomic evidence from the Household Finance and Consumption Survey. We show that the life-cycle profiles of income and asset accumulation decisions are important determinants of redistributive effects of monetary shocks and ignoring them can lead to highly misleading conclusions. The redistribution is mainly driven by nominal assets and labor income, less by real and housing assets. Overall, we find that a typical monetary policy easing redistributes welfare from older to younger generations.

Keywords: monetary policy; life-cycle models; wealth redistribution (search for similar items in EconPapers)
JEL-codes: E31 E52 J11 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2021
New Economics Papers: this item is included in nep-age, nep-dge, nep-fdg, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.wne.uw.edu.pl/index.php/download_file/6281/ First version, 2021 (application/pdf)

Related works:
Journal Article: Intergenerational Redistributive Effects of Monetary Policy (2022)
Working Paper: Intergenerational redistributive effects of monetary policy (2021)
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:war:wpaper:2021-03

Access Statistics for this paper

More papers in Working Papers from Faculty of Economic Sciences, University of Warsaw Contact information at EDIRC.
Bibliographic data for series maintained by Marcin Bąba ().