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Household net saving positions and unconventional monetary policy transmission: Evidence from Japan

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  • Renzhi, Nuobu

Abstract

This paper investigates the heterogeneous effect of unconventional monetary policy (UMP) on household consumption across different household net saving positions. Using Japanese household survey data on household balance sheet positions, income, and expenditures, we enhance the role of the cash-flow channel in the UMP transmission. Households in a lower net saving position (with a higher level of debt) exhibit significantly positive expenditure responses to expansionary UMP shocks. In contrast, households in an upper net saving position (with a lower level of debt) respond little. We also find that households in lower net saving positions primarily drive the aggregate effects of UMP on household consumption.

Suggested Citation

  • Renzhi, Nuobu, 2023. "Household net saving positions and unconventional monetary policy transmission: Evidence from Japan," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23000987
    DOI: 10.1016/j.pacfin.2023.102032
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    Keywords

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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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