Arbeitspapier
Monetary policy with heterogeneous households and financial frictions
This paper presents and estimates a sticky-price model with heterogenous households and financial frictions. Frictions in state-contingent asset markets lead to imperfect risksharing among households with idiosyncratic labor incomes. I study the impacts of the introduced financial frictions on optimal monetary policy by documenting implications for the central bank's objective function, the equation that characterizes inflation-output gap trade-offers, targeting rules, interest rate rules, and welfare of the economy. Employing the estimated model, the paper argues that the central bank should place a stronger emphasis on stabilizing inflation than it has, and failing to do so can generate nontrivial welfare costs.
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper ; No. 2010-02
- Classification
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Wirtschaft
- Subject
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Geldpolitik
Preisrigidität
Finanzmarkt
Unvollkommener Markt
New-Keynesian Phillips Curve
Theorie
- Event
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Geistige Schöpfung
- (who)
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Lee, Jae Won
- Event
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Veröffentlichung
- (who)
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Rutgers University, Department of Economics
- (where)
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New Brunswick, NJ
- (when)
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2010
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Lee, Jae Won
- Rutgers University, Department of Economics
Time of origin
- 2010
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