NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

An Heterogeneous-Agent New-Monetarist Model with an Application to Unemployment

Guillaume Rocheteau, Pierre-Olivier Weill, Tsz-Nga Wong

NBER Working Paper No. 25220
Issued in November 2018, Revised in May 2019
NBER Program(s):Economic Fluctuations and Growth, Monetary Economics

We develop a New Monetarist model with expenditure and unemployment risks that generates equilibria with non-degenerate distribution of money holdings. Distributional effects can overturn key insights of the model with degenerate distributions, e.g., the value of money depends on the income distribution; a one-time money injection raises aggregate real balances in the short run –price adjustments look sluggish; anticipated inflation can raise output and welfare; there can be a long-run trade-o¤ between inflation and unemployment. Distributional effects also generate a quantitatively significant aggregate demand channel through which transfers financed with money creation can raise employment, and productivity shocks are amplified.

download in pdf format
   (546 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w25220

Published: Guillaume Rocheteau & Pierre-Olivier Weill & Tsz-Nga Wong, 2019. "An Heterogeneous-Agent New-Monetarist Model with an Application to Unemployment," Journal of Monetary Economics, .

 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us