NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Adrien Auclert

Department of Economics
Stanford University
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Stanford, CA 94305-6072

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NBER Program Affiliations: EFG , ME , IFM
NBER Affiliation: Faculty Research Fellow

NBER Working Papers and Publications

May 2017Monetary Policy and the Redistribution Channel
w23451
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.
 
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