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X-WR-CALNAME;VALUE=TEXT:Monetary Policy and the Wealthy Hand-to-Mouth
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SUMMARY:Monetary Policy and the Wealthy Hand-to-Mouth
DESCRIPTION:<p>	Within the context of the Euro Area (EA) this presentation investigates the relationship between country specific output responses to a common monetary policy shock and the share of liquidity constraint households in each country. We recover GDP impulse responses using a local projections instrumental variables (LPIV) estimation. The instrument for the monetary policy shock is the change of overnight indexed swap rates in a narrow time window around ECB announcements. We show that a monetary policy shock has heterogeneous effects on real GDP across countries, both in terms of timing and size. The effectiveness of monetary policy is closely related to the share of households with low levels of liquid assets: findings show that a 10 percentage point increase in the share of liquidity constrained households is associated with a real GDP response that is 0.7 percentage points stronger. The results are driven by liquidity constraint households who hold positive illiquid wealth, i.e. the wealthy Hand-to-Mouth.</p><p style="text-align: center;">	<img height="216" src="http://microeconomicinsights.org/wp-content/uploads/2016/02/coins_bw1-e1460457605156.jpg" width="381"></p><p>	<strong>Speaker: </strong>Jose E. Gallegos, Visiting Fellow, Department of Economics, Harvard University; IIES, Stockholm University.</p><p>	<strong>Sponsors: </strong>RCC.</p>
LOCATION:RCC Seminar Room, 26 Trowbridge St., Cambridge MA
STATUS:CONFIRMED
DTSTART:20190205T213000Z
DTEND:20190205T223000Z
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