IDEAS home Printed from https://ideas.repec.org/p/red/sed019/409.html

Demographics and Monetary Policy Shocks

Author

Listed:
  • Kimberly Berg

    (Miami University)

  • Chadwick Curtis

    (University of Richmond)

  • Nelson Mark

    (University of Notre Dame)

  • Steven Lugauer

    (University of Kentucky)

Abstract

We study how consumption of households at different stages of the life cycle responds to monetary policy shocks. We find that older households have a higher consumption re- sponse than younger households. Amongst older households, the consumption response is also increasing in income. This, along with data on age-related net wealth, presents evidence for a wealth effect playing a role in driving the response patterns. This mecha- nism is studied further in a partial-equilibrium life-cycle model of consumption, saving, and labor-supply decisions. The model qualitatively explains these empirical patterns. Understanding the heterogeneity in consumption responses across age groups is im- portant for understanding the transmission of monetary policy, especially as the U.S. population grows older.

Suggested Citation

  • Kimberly Berg & Chadwick Curtis & Nelson Mark & Steven Lugauer, 2019. "Demographics and Monetary Policy Shocks," 2019 Meeting Papers 409, Society for Economic Dynamics.
    • Handle: RePEc:red:sed019:409
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Esra N. Kilci & Veli Yilanci, 2022. "Impact of Monetary Aggregates on Consumer Behavior:A Study on the Policy Response of the Federal Reserve against COVID-19," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 29(1), pages 100-122.
    2. Sigal Ribon, 2023. "Differential Effects of Monetary Policy on Household Consumption: The Case of Israel," Israel Economic Review, Bank of Israel, vol. 21(1), pages 35-73, March.
    3. Fadejeva, Ludmila & Kantur, Zeynep, 2023. "Wealth distribution and monetary policy," Economic Modelling, Elsevier, vol. 125(C).
    4. Joseph Kopecky & Giacomo Mangiante, 2025. "Monetary Policy Goes Boomer: The Effect of Population Age Structure on Policy Transmission," Trinity Economics Papers tep1725, Trinity College Dublin, Department of Economics.
    5. Kopecky, Joseph, 2022. "The age for austerity? Population age structure and fiscal consolidation multipliers," Journal of Macroeconomics, Elsevier, vol. 73(C).
    6. Giacomo Mangiante, 2022. "Demographic Trends and the Transmission of Monetary Policy," Cahiers de Recherches Economiques du Département d'économie 22.04, Université de Lausanne, Faculté des HEC, Département d’économie.
    7. Joo, Hyundo & Park, Seungmoon & So, Inhwan, 2024. "Heterogeneous regional effects of monetary policy: Evidence from Korea," Journal of Asian Economics, Elsevier, vol. 94(C).
    8. Priya, Pragati & Sharma, Chandan, 2025. "The uncertainty-driven channel of monetary transmission on household consumption: the role of households’ balance sheet positions," International Review of Economics & Finance, Elsevier, vol. 103(C).
    9. Fergus Cumming & Lisa Dettling, 2024. "Monetary Policy and Birth Rates: The Effect of Mortgage Rate Pass-Through on Fertility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(1), pages 229-258.
    10. Ryszard Kowalski & Agnieszka Strzelecka & Agnieszka Wałęga & Grzegorz Wałęga, 2023. "Do Children Matter to the Household Debt Burden?," Journal of Family and Economic Issues, Springer, vol. 44(4), pages 1007-1022, December.
    11. Radke, Lucas & Wicknig, Florian, 2021. "Experience-Based Heterogeneity in Expectations and Monetary Policy," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242414, Verein für Socialpolitik / German Economic Association.
    12. Tomás Opazo, 2023. "The Heterogeneous Effect of Monetary Policy Shocks: Evidence for US Households," Working Papers Central Bank of Chile 992, Central Bank of Chile.
    13. John V. Leahy & Aditi Thapar, 2019. "Demographic Effects on the Impact of Monetary Policy," NBER Working Papers 26324, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed019:409. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.