The Propagation of Monetary Policy Shocks in a Heterogeneous Production Economy

We thank Klaus Adam, Susanto Basu, Carlos Carvalho, Xavier Gabaix, Gita Gopinath, Yuriy Gorodnichenko, Bernard Herskovic, Hugo Hopenhayn, Pete Klenow, Alireza Tahbaz-Salehi, Harald Uhlig, and conference and seminar participants at the Annual Inflation Targeting Seminar of the Banco Central do Brasil, AEA, Banque de France Conference on Price Setting and Inflation, BIS, Brandeis, Cambridge, Carlos III, Cleveland Fed conference on Inflation: Drivers and Dynamics Conference, EEA, Einaudi, FGV Sao Paulo, Konstanz seminar on Monetary Theory, Oxford, St. Louis Fed, SED, Toulouse. Pasten is grateful for the support of the Universite de Toulouse Capitole during his stays in Toulouse. Weber thanks the Fama-Miller Center at the University of Chicago Booth School of Business and the Fama Research Fund for financial support. We also thank Will Cassidy, Seongeun Kim, Matt Klepacz and Michael Munsell for excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research or the Central Bank of Chile.