Épargne de précaution, fluctuations macroéconomiques et politique monétaire

This paper presents a New Keynesian Model with imperfect insurance and endogenous involuntary unemployment, in the spirit of Ravn and Sterk [2017, 2020] and Challe [2020]. Under a particular set of assumptions, the model’s dynamics boil down to three equations, in a similar fashion as with the textbook three-equation New Keynesian model (in which insurance is perfect and there is no unemployment). We use this analytical framework to illustrate that, in the absence of suitable macroeconomic stabilization policy, household precautionary-saving behavior can significantly destabilize aggregate demand, output and employment. We pay particular attention to i) steady-state determinacy and the possibility of self-fulfilling expectations; ii) the amplification of macroeconomic shocks (notably productivity socks); iii) the transmission and optimality of monetary policy.