Heterogeneous Consumers, Demand Regimes, Monetary Policy and Equilibrium Determinacy

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Heterogeneous Consumers, Demand Regimes, Monetary Policy and Equilibrium Determinacy

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Giovanni Di Bartolomeo (University of Teramo)
Lorenza Rossi (Catholic University of Milan and University of Crete)

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Abstract

This paper investigates the effects of monetary policy in presence of heterogeneous consumers. We study the effectiveness (quantitative effects) of monetary policy and equilibrium determinacy properties of a New Keynesian DSGE model where a fraction of households cannot smooth consumption. We show that twodemand regimes can emerge (according to the «slope» of IS curve) and that the main unconventional results, stressed by recent literature, only hold in the unconventional case of an IS curve positively sloped.

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Article provided by SIPI Spa in its journal Rivista di Politica Economica.

Volume (Year): 97 (2007)
Issue (Month): 5 (September-October)
Pages: 111-142
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Handle: RePEc:rpo:ripoec:v:97:y:2007:i:5:p:111-142

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Paper
- Di Bartolomeo Giovanni & Rossi Lorenza, 2007. "Heterogeneous consumers, demand regimes, monetary policy and equilibrium determinacy," wp.comunite 0024, Department of Communication, University of Teramo. [Downloadable!]
- Di Bartolomeo, Giovanni & Rossi, Lorenza, 2005. "Heterogeneous Consumers, Demand Regimes, Monetary Policy and Equilibrium Determinacy," MPRA Paper 5100, University Library of Munich, Germany, revised 08 Sep 2007. [Downloadable!]

Find related papers by JEL classification:
E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization

References listed on IDEAS
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Other versions:
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