Arbeitspapier
Monetary policy and the persistent aggregate effects of wealth redistribution
We identify a sizable wealth redistribution channel which creates a monetary policy trade-off whereby short-term economic stimulus is followed by persistently lower output over the medium term. This trade-off is stronger in economies with more nominal household debt but weakened by a more aggressive monetary policy stance and under price-level targeting. Given this trade-off, low-for-long episodes can lead to persistently depressed output. The mediumterm implications of the wealth redistribution channel rely on the presence of labor supply heterogeneity, which we show both analytically and in the context of an estimated New Keynesian general equilibrium model with household heterogeneity.
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Canada Staff Working Paper ; No. 2021-38
- Classification
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Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Monetary Policy, Central Banking, and the Supply of Money and Credit: General
- Subject
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Monetary policy framework
Monetary policy transmission
- Event
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Geistige Schöpfung
- (who)
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Kuncl, Martin
Ueberfeldt, Alexander
- Event
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Veröffentlichung
- (who)
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Bank of Canada
- (where)
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Ottawa
- (when)
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2021
- DOI
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doi:10.34989/swp-2021-38
- Handle
- Last update
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10.03.2025, 11:46 AM CET
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
- Kuncl, Martin
- Ueberfeldt, Alexander
- Bank of Canada
Time of origin
- 2021