LIQUIDITY, MONETARY POLICY, AND UNEMPLOYMENT: A NEW MONETARIST APPROACH

International Economic Review - Tập 60 Số 2 - Trang 1005-1025 - 2019
Mei Dong1, Sylvia Xiaolin Xiao2,3
1University of Melbourne, Australia
2Peking University, China
3We thank Guido Menzio and three referees for insightful comments. We also thank Chris Edmond, Pedro Gomis-Porqueras, Susumu Imai, Benoit Julien, Chao Gu, Tim Kam, Gordon Menzies, Guillaume Rocheteau, Jeff Sheen, Chi Chung Siu, John Wooders, Stephen Willamson, Randall Wright, Yajun Xiao, and seminar participants at Deakin, Monash, RMIT, Tsinghua, Adelaide, Melbourne, UNSW, Queensland, UTS, UW-Madison, St. Louis Fed, the 26th Australian PhD Conference in Economics and Business, Sydney Macro Reading Group, and the 2014 Chicago Fed Summer Workshop on Money, Banking, Payments, and Finance for helpful comments. Dong acknowledges financial support under Australian Research Council's DECRA scheme (project number DE120102589). Xiao acknowledges the hospitality and support when visiting UW-Madison, St. Louis Fed, and Melbourne, and the funding support from Dan Searle Fellowship for her postdoc at UW-Madison.

Tóm tắt

AbstractWe discover a consumption channel of monetary policy in a model with money and government bonds. When the central bank withdraws government bonds (short‐term or long‐term) through open market operations, it lowers returns on bonds. The lower return has a direct negative impact on consumption by households that hold bonds and an indirect negative impact on consumption by households that hold money. As a result, firms earn less profits from production, which leads to higher unemployment. The existence of such a consumption channel can help us understand the effects of unconventional monetary policy.

Từ khóa


Tài liệu tham khảo

10.1162/qjec.2009.124.3.911

10.1086/324389

Alvarez F., 2001, Interest Rates and Inflation, AEA Papers and Proceedings, 91, 219

Badarinza C. J.Campbell andT.Ramadorai “International Comparative Household Finance ” NBER Working Paper No. 22066 2016.

Bai Y. J.Rios‐Rull andK.Storesletten “Demand Shocks as Technology Shocks ” mimeo 2017.

10.1257/aer.101.1.371

10.1016/j.red.2014.08.002

10.1111/j.1468-0297.2012.02550.x

Geromichalos A. L.Herrenbrueck andK.Salyer “A Search‐Theoretic Model of the Term Premium ” Working Papers 138 Department of Economics University of California Davis 2013.

10.1016/j.jet.2016.02.011

10.1257/aer.20141297

Herrenbrueck L. “Quantitative Easing and the Liquidity Channel of Monetary Policy ” Working Paper Department of Economics Simon Fraser University 2014.

10.1086/685909

Keys B. J. T.Piskorski A.Seru andV.Yao “Mortgage Rates Household Balance Sheets and the Real Economy ” NBER Working Paper No. 20561 2014.

Khan A., 2006, The Role of Segmented Markets in Monetary Policy, FRB Phila. Business Review, 4, 1

10.1086/429804

10.1086/668864

Maggio M. D. A.Kermani andR.Ramcharan “Monetary Policy Pass‐Through: Household Consumption and Voluntary Deleveraging ” mimeo 2015.

Mahmoudi B. “Liquidity Effects of Central Banks' Asset Purchase Programs ” MPRA Paper No. 49424 2013.

10.1093/qje/qjt020

10.3982/ECTA10451

10.2307/2297896

10.1016/j.jedc.2012.07.005

10.1016/j.jmoneco.2014.04.006

10.1016/j.jmoneco.2018.04.012

Schuh S. andJ.Stavins “The 2013 Survey of Consumer Payment Choice: Summary Results ” Federal Reserve Bank of Boston Research Data Reports No. 15‐4 2015.

10.1016/j.jet.2010.01.004

Wen Y. “Evaluating Unconventional Monetary Policies—Why Aren't They More Effective ” FRB of St. Louis Working Paper 2013‐028B 2013.

10.1093/qje/qjt030

10.1257/aer.102.6.2570

Williamson S. “Scarce Collateral the Term Premium and Quantitative Easing ” Working Paper 2013.

Thông tin
Thông tin xuất bản

International Economic Review

Tập 60 Số 2

1005-1025

Thông tin tác giả