Inequality-constrained monetary policy in a financialized economy
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Metadatos
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INVESTIGACIONMetadatos
Título
Inequality-constrained monetary policy in a financialized economyFecha de publicación
2023-10-31Editor
ElsevierISSN
0167-2681; 2328-7616Cita bibliográfica
Fierro, Luca Eduardo, Federico Giri, and Alberto Russo. "Inequality-constrained monetary policy in a financialized economy." Journal of Economic Behavior & Organization 216 (2023): 366-385.Tipo de documento
info:eu-repo/semantics/articleVersión
info:eu-repo/semantics/acceptedVersionPalabras clave / Materias
Resumen
We study how income inequality affects monetary policy through the inequality-household debt channel. We design a minimal macro Agent-Based model that replicates several stylized facts, including two novel ones: falling ... [+]
We study how income inequality affects monetary policy through the inequality-household debt channel. We design a minimal macro Agent-Based model that replicates several stylized facts, including two novel ones: falling aggregate saving rate and decreasing bankruptcies during the household's debt boom phase. When inequality meets financial liberalization, a leaning against-the-wind strategy can preserve financial stability at the cost of high unemployment, whereas an accommodative strategy, i.e. lowering the policy rate, can dampen the fall of aggregate demand at the cost of larger leverage. We conclude that inequality may constrain the central bank, even when it is not explicitly targeted. [-]
Publicado en
Journal of Economic Behavior and Organization 216 (2023) 366–385Datos relacionados
Data will be made available on request.Entidad financiadora
Universitat Jaume I | Ministerio de Ciencia, Innovación y Universidades | Generalitat Valenciana
Código del proyecto o subvención
UJI-B2020-16 | AICO/2021/005 | PID2022-136977NB-I00
Derechos de acceso
0167-2681/© 2023 Elsevier B.V. All rights reserved
info:eu-repo/semantics/embargoedAccess
info:eu-repo/semantics/embargoedAccess
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