TY  - JOUR
AU  - Auclert, Adrien
TI  - Monetary Policy and the Redistribution Channel
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 23451
PY  - 2017
Y2  - May 2017
DO  - 10.3386/w23451
UR  - http://www.nber.org/papers/w23451
L1  - http://www.nber.org/papers/w23451.pdf
N1  - Author contact info:
Adrien Auclert
Department of Economics
Stanford University
579 Jane Stanford Way
Stanford, CA 94305
E-Mail: aauclert@stanford.edu
AB  - 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 U.S. data suggest that all three channels are likely to amplify the effects of monetary policy. A standard incomplete markets model can deliver the empirical magnitudes if assets have plausibly high durations but a counterfactual degree of inflation indexation.
ER  -