Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/183499
Authors: 
Chen, Siyan
Desiderio, Saul
Year of Publication: 
2018
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 12 [Year:] 2018 [Issue:] 2018-62 [Pages:] 1-32
Abstract: 
Empirical studies have pointed out that monetary policy may significantly affect income and wealth inequality. To investigate the distributive properties of monetary policy the authors resort to an agent-based macroeconomic model where firms, households and one bank interact on the basis of limited information and adaptive rules-of-thumb. Simulations show that the model can replicate fairly well a number of stylized facts, especially those relative to the business cycle. The authors address the issue using three types of computational experiments, including a global sensitivity analysis carried out through a novel methodology which greatly reduces the computational burden of simulations. The result emerges that a more restrictive monetary policy increases inequality, even though this effect may differ across groups of households. In addition, it appears to be attenuated if the bank's willingness to lend is lower. The overall analysis suggests that inequality can constitute valuable information also for central banks.
Subjects: 
Economic inequality
monetary policy
agent-based models
NK-DSGE models
stock-flow consistency
global sensitivity analysis
JEL: 
C63
D31
D50
E52
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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