TY  - GEN
TI  - Heterogeneous consumers, segmented asset markets, and the effects of monetary policy
T3  - Discussion Paper Series / University of Heidelberg, Department of Economics
Y1  - 2012/12//
AV  - public
ID  - heidok14259
KW  - Segmented Asset Markets 
KW  -  Monetary Policy 
KW  -  Countercyclical Markups 
KW  -  Liquidity Effect 
KW  -  Expenditure Dispersion 
UR  - https://archiv.ub.uni-heidelberg.de/volltextserver/14259/
A1  - Enders, Zeno
EP  - 32
N2  - This paper examines how segmented asset markets can generate real and nominal effects of monetary policy. I develop a model, in which varieties of consumption bundles are purchased sequentially. Newly injected money thus disseminates slowly through the economy via second-round effects and induces a longer-lasting, non-degenerate wealth distribution. As a result, the demand elasticity differs across consumers, affecting optimal markups chosen by producers. The model predicts a short-term inflation-output trade-off, a liquidity effect, countercyclical markups, and procyclical wages and expenditure dispersion across consumers after monetary shocks. Including a modest degree of real or nominal wage rigidity yields responses that are also quantitatively in line with empirical evidence.

ER  -