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A HANK2 model of monetary unions

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Bibliographic Details
Authors and Corporations: Bayer, Christian (Author), Kriwoluzky, Alexander (Author), Müller, Gernot J. (Author), Seyrich, Fabian (Author)
Other Authors: Kriwoluzky, Alexander 1978- [Author] • Müller, Gernot J. 1975- [Author] • Seyrich, Fabian [Author]
Type of Resource: E-Book
Language: English
published:
Series: Deutsches Institut für Wirtschaftsforschung: Discussion papers ; 2044
Subjects:
HANK2
OCA theory
Two-country model
monetary union
spillovers
monetary policy
heterogeneity
inequality
households
Graue Literatur
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Description
Summary: How does a monetary union alter the impact of business cycle shocks at the household level? We develop a Heterogeneous Agent New Keynesian model of two countries (HANK2) and show in closed form that a monetary union shifts the adjustment to a shock horizontally - across countries - within the brackets of the union-wide wealth distribution rather than vertically - that is, across the brackets of the union-wide wealth distribution. Calibrating the model to the euro area reveals that a monetary union alters the impact of shocks most strongly in the tails of the wealth distribution but leaves the middle class almost unaffected.
Physical Description: 1 Online-Ressource (circa 53 Seiten); Illustrationen