Please use this identifier to cite or link to this item:
Enders, Zeno
Year of Publication: 
Series/Report no.: 
Discussion Paper Series, University of Heidelberg, Department of Economics 537
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.
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:
628.47 kB

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