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Understanding hank: the mechanisms behind contractionary monetary policy
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Orientador(es)
Resumo(s)
This paper investigates how wealthy hand-to-mouth (W-HtM) agents affect the responses of
output to a monetary tightening. Accordingly, a one- and two-asset HANK model are calibrated
to respectively match the percentage of poor hand-to-mouth (P-HtM), and the percentage of
both P-HtM and W-HtM. Findings suggest that moving to a two-asset HANK, a framework
that better reflects the empirical composition of household portfolios, lessens the impact of
monetary policy. Importantly, the percentage of W-HtM households is critical to explain the
cross-country heterogeneity in the magnitude differences between model specifications.
Descrição
Palavras-chave
Monetary policy Hank Liquidity constraints Hand-to-mouth agents