Inequality-constrained monetary policy in a financialized economy
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Metadades
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INVESTIGACIONMetadades
Títol
Inequality-constrained monetary policy in a financialized economyData de publicació
2023-10-31Editor
ElsevierISSN
0167-2681; 2328-7616Cita bibliogràfica
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.Tipus de document
info:eu-repo/semantics/articleVersió
info:eu-repo/semantics/acceptedVersionParaules clau / Matèries
Resum
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. [-]
Publicat a
Journal of Economic Behavior and Organization 216 (2023) 366–385Dades relacionades
Data will be made available on request.Entitat finançadora
Universitat Jaume I | Ministerio de Ciencia, Innovación y Universidades | Generalitat Valenciana
Codi del projecte o subvenció
UJI-B2020-16 | AICO/2021/005 | PID2022-136977NB-I00
Drets d'accés
0167-2681/© 2023 Elsevier B.V. All rights reserved
info:eu-repo/semantics/embargoedAccess
info:eu-repo/semantics/embargoedAccess
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