Arbeitspapier
Keeping Up with the Joneses and the Welfare Effects of Monetary Policy
This paper examines the implications of "keeping up with the Joneses" preferences (jealousy) for the welfare effects of monetary policy. I develop a New Keynesian model, where households are jealous and the central bank follows the Taylor rule. I show that the welfare effects of monetary policy over time depend significantly on the relative strength of the consumption externality caused by jealousy and the monopolistic distortion. If jealousy (the monopolistic distortion) dominates, then a decrease in the interest rate reduces (increases) welfare in the short run, but increases (reduces) welfare in the medium run.
- Sprache
-
Englisch
- Erschienen in
-
Series: Discussion paper ; No. 65
- Klassifikation
-
Wirtschaft
Money and Interest Rates: General
Monetary Policy, Central Banking, and the Supply of Money and Credit: General
Monetary Policy
- Thema
-
Monetary policy
jealousy
consumption externality
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Tervala, Juha
- Ereignis
-
Veröffentlichung
- (wer)
-
Aboa Centre for Economics (ACE)
- (wo)
-
Turku
- (wann)
-
2011
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Tervala, Juha
- Aboa Centre for Economics (ACE)
Entstanden
- 2011
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