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Different Unconventional Monetary Policies, Different Stories? A HANK Perspective

Author

Listed:
  • Charles de Beauffort

    (National Bank of Belgium, Economics and Research Department)

  • Ansgar Rannenberg

    (National Bank of Belgium, Economics and Research Department)

Abstract

We develop a two-asset HANK model to examine the effects of various unconventional monetary policies, including Quantitative Easing, Operation Twist, Reserve Management Purchases and Liquidity Facilities. Our analysis focuses on the macrofinancial implications of these policies, as well as their impact on wealth and income inequality through shifts in portfolio composition between liquid and illiquid assets. The model features a financial sector with mutual funds and banks that invest in short- and long-term bonds, reserves, and credit to firms. Calibrating the model to the US economy, we find that Operation Twist has weaker effects than standard QE interventions, although all strategies are qualitatively similar in their impact on output, inflation, and the composition of liquid and illiquid assets. Quantitative Easing and Liquidity Facilities are more effective at the zero lower bound, and are the two policies that raise wealth inequality most.

Suggested Citation

  • Charles de Beauffort & Ansgar Rannenberg, 2026. "Different Unconventional Monetary Policies, Different Stories? A HANK Perspective," Working Paper Research 504, National Bank of Belgium.
    • Handle: RePEc:nbb:reswpp:202610-504
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    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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