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An Heterogeneous-Agent New-Monetarist Model with an Application to Unemployment / Guillaume Rocheteau, Pierre-Olivier Weill, Tsz-Nga Wong.
- Format:
- Book
- Author/Creator:
- Rocheteau, Guillaume.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25220.
- NBER working paper series no. w25220
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- We develop a New Monetarist model with expenditure and unemployment risks that generates equilibria with non-degenerate distribution of money holdings. Distributional effects can overturn key insights of the model with degenerate distributions, e.g., the value of money depends on the income distribution; a one-time money injection raises aggregate real balances in the short run -price adjustments look sluggish; anticipated inflation can raise output and welfare; there can be a long-run trade-o¤ between inflation and unemployment. Distributional effects also generate a quantitatively significant aggregate demand channel through which transfers financed with money creation can raise employment, and productivity shocks are amplified.
- Notes:
- Print version record
- November 2018.
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