Monetary Policy and the Redistribution Channel

By Adrien Auclert. The American Economic Review, 2017

719 citations recorded by the source corpus.

This paper evaluates the role of redistribution in the transmission mechanism of monetary policy to consumption. Three channels affect aggregate spending when winners and losers have different marginal propensities to consume: an earnings heterogeneity channel from unequal income gains, a Fisher channel from unexpected inflation, and an interest rate exposure channel from real interest rate changes. Sufficient statistics from Italian and US data suggest that all three channels are likely to amplify the effects of monetary policy. (JEL E21, E31, E43, E52)

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/01a3f55f1f8a496c5cfda128152833915d353d44

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Citations in the corpus

CENTRAL BANK POLICIES AND INCOME AND WEALTH INEQUALITY: A SURVEY (2019, positive): “Auclert (2016), using an Aiyagari type model, emphasizes the importance of the distribution of wealth across agents for understanding the redistributive effects of monetary policy.”
Mortgage Design in an Equilibrium Model of the Housing Market (2018, neutral): “Relatedly, several papers argue that ARMs allow for stronger transmission of monetary policy since rate changes directly affect household balance sheets (Calza, Stracca, and Monacelli (2013), Auclert (2019), Cloyne, Ferreira, and Surico (2019)).”
Monetary Policy and Heterogeneity: An Analytical Framework (2018, positive): “…recessions (Ravn and Sterk, 2017; den Haan, Rendahl, and Riegler, 2018); monetary policy transmission (Gornemann, Kuester, and Nakajima, 2016; Auclert, 2016; Debortoli and Gali, 2017); inequality and aggregate demand (Auclert and Ronglie, 2017); precautionary liquidity and portfolio…”
The effects of quasi-random monetary experiments (2020, background): “For example, Auclert (2017) shows that the effectiveness of monetary policy depends on household balance sheet exposure through the redistributive channels that interest rates can have.”
Forward Guidance without Common Knowledge (2018, positive): “…mechanisms through which consumer spending today responds to expectations of economic conditions in the short to medium run, such precautionary motives, borrowing constraints, and “hand-to-mouth consumers” (Galí, López-Salido and Vallés, 2007; Kaplan, Moll and Violante, 2016; Auclert, 2017).”
The Fiscal Multiplier (2019, positive): “The TANK model also misses out on the sensitivity to the size of the transfer and all of the dynamic anticipation and propagation effects because the response (13)For a discussion on the empirical evidence on intertemporal MPCs see Auclert et al. (2018).”
Transmission of Monetary Policy with Heterogeneity in Household Portfolios (2018, background): “(2014), Auclert (2015), Bayer et al. (2015), Werning (2015), McKay and Reis (2016), McKay et al. (2016), and Kaplan et al. (2016). 6Exogenous heterogeneity is well-established in New Keynesian models.”
Microeconomic Heterogeneity and Macroeconomic Shocks (2018, background): “As a result, surprise inflation can have redistributive effects (Doepke and Schneider, 2006; Auclert, 2017) that our model specification misses entirely.”
On DSGE Models (2018, neutral): “(2009) describe global DSGE models used for policy analysis at the International Monetary Fund (IMF), while Benes et al. (2014) describe MAPMOD, a DSGE model used at the IMF for the analysis of macroprudential policies. Clinton et al. (2017) describe the role of DSGE models in policy analysis at the”
Precautionary Savings, Illiquid Assets, and the Aggregate Consequences of Shocks to Household Income Risk (2019, background): “8Further examples of the New-Keynesian incomplete markets literature are Auclert (2015); Challe and Ragot (2016); McKay et al. (2016); McKay and Reis (2016); Werning (2015), all of which, however, build on a single-asset framework.”
The Impact of Monetary Policy on Inequality in the UK. An Empirical Analysis (2017, background): “In a recent contribution, Auclert (2016) points out that the impact of monetary policy through this channel depends on the maturity duration of assets and liabilities.”
Financial Frictions and the Wealth Distribution (2019, positive): “An obvious candidate is the analysis of the zero lower bound (ZLB) in heterogeneous agent New Keynesian (HANK) models models such as Auclert (2016), Gornemann, Kuester, and Nakajima (2012), Kaplan, Moll, and Violante (2018), Luetticke (2015), or McKay, Nakamura, and Steinsson (2016). The ZLB natural”
Monetary Policy when Households have Debt: New Evidence on the Transmission Mechanism (2019, neutral): “(2012), Gornemann, Kuester and Nakajima (2012), Sterk and Tenreyro (2014), Wong (2014) and Auclert (2014), which analyze the redistributive effects of monetary policy focusing on differences across demographics (rather than household debt positions as we do here).”