Department of Economics

Faculty of Arts and Social Sciences


Seminar - Upcoming

2013 Asia Summer Institute in Behavioral Economics
Asian Meeting of the Econometric Society 2013
Past Events

Department Seminar


Doves for the Rich, Hawks for the Poor? Distributional Consequences of Monetary Policy


Keith Kuester
University of Bonn
Date: Feb 16, Tue

Time: 4 - 5:30 pm

Venue: Lim Tay Boh Seminar Room (AS2 03-12)
National University of Singapore
1 Arts Link, Singapore 117570

Chair: Martin Bodenstein


We build a New Keynesian business cycle model with the novel feature of rich household heterogeneity. Households differ in the amount of savings, their patience, labor productivity, and employment status. Labor-market transitions are subject to matching frictions. We allow for aggregate saving. As a result, household heterogeneity affects the transmission of monetary policy to aggregate consumption, but hardly to GDP. Nevertheless, monetary policy has sizable distributional consequences. A majority of households would prefer monetary policy to be more accommodative than would be optimal absent the heterogeneity and market incompleteness, helping "Main Street'' at the expense of "Wall Street"