This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. June 2019
  5. Monetary Policy and the Redistribution Channel

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Monetary Policy and the Redistribution Channel

  • Adrien Auclert
American Economic Review
vol. 109, no. 6, June 2019
(pp. 2333–67)
Download Full Text PDF

Abstract

This paper evaluates the role of redistribution in the transmission mechanism of monetary policy to consumption. Three channels affect aggregate spending when winners and losers have different marginal propensities to consume: an earnings heterogeneity channel from unequal income gains, a Fisher channel from unexpected inflation, and an interest rate exposure channel from real interest rate changes. Sufficient statistics from Italian and US data suggest that all three channels are likely to amplify the effects of monetary policy.

Citation

Auclert, Adrien. 2019. "Monetary Policy and the Redistribution Channel." American Economic Review, 109 (6): 2333–67. DOI: 10.1257/aer.20160137

Additional Materials

JEL Classification

  • E21 Macroeconomics: Consumption; Saving; Wealth
  • E31 Price Level; Inflation; Deflation
  • E43 Interest Rates: Determination, Term Structure, and Effects
  • E52 Monetary Policy