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Heterogeneous consumers, segmented asset markets, and the real effects of monetary policy

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  • Enders, Zeno

Abstract

This paper proposes a novel mechanism by which changes in the distribution of money holdings have real effects. Specifically, I develop a flexible-price model of segmented asset markets that generates real aggregate effects of monetary policy through the dependence of optimal markups on the heterogeneity of money holdings. Because varieties of consumption bundles are purchased sequentially, newly injected money disseminates slowly throughout the economy via second-round effects.

Suggested Citation

  • Enders, Zeno, 2017. "Heterogeneous consumers, segmented asset markets, and the real effects of monetary policy," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168227, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc17:168227
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    4. Peng, Yulei & Zervou, Anastasia, 2022. "Monetary policy rules and the equity premium in a segmented markets model," Journal of Macroeconomics, Elsevier, vol. 73(C).

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    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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