Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127355
Authors: 
Enders, Zeno
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper Series, University of Heidelberg, Department of Economics 537
Abstract: 
This paper examines how segmented asset markets can generate real and nominal effects of monetary policy. I develop a model, in which varieties of consumption bundles are purchased sequentially. Newly injected money thus disseminates slowly through the economy via second-round effects and induces a longer-lasting, non-degenerate wealth distribution. As a result, the demand elasticity differs across consumers, affecting optimal markups chosen by producers. The model predicts a short-term inflation-output trade-off, a liquidity effect, countercyclical markups, and procyclical wages and expenditure dispersion across consumers after monetary shocks. Including a modest degree of real or nominal wage rigidity yields responses that are also quantitatively in line with empirical evidence.
Subjects: 
Segmented Asset Markets
Monetary Policy
Countercyclical Markups
Liquidity Effect
Expenditure Dispersion
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
628.47 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.