Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215053 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8051
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We estimate a Heterogeneous-Agent New Keynesian model with sticky household expectations that matches existing microeconomic evidence on marginal propensities to consume and macroeconomic evidence on the impulse response to a monetary policy shock. Our estimated model uncovers a central role for investment in the transmission mechanism of monetary policy, as high MPCs amplify the investment response in the data. This force also generates a procyclical response of consumption to investment shocks, leading our model to infer a central role for these shocks as a source of business cycles.
Subjects: 
HANK
estimation
investment
JEL: 
E21
E22
E32
E43
E52
E70
Document Type: 
Working Paper
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