Monetary Policy Under Okun’s Hypothesis
The current monetary policy framework of the Fed intends to be more ’inclusive’ by running the economy hot for longer during expansions.
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2
result(s)
From Micro to Macro Hysteresis: Long-Run Effects of Monetary Policy
Staff working paper 2024-39
Felipe Alves,
Giovanni L. Violante
We explore the long-run effects of a monetary policy shock in a Heterogeneous Agent New Keynesian model built on the micro evidence that job losses lead to persistently lower individual earnings through a combination of skill decay and abandonment of the labour force.
Content Type(s):
Staff research,
Staff working papers
JEL Code(s):
E,
E2,
E21,
E24,
E3,
E31,
E32,
E5,
E52,
J,
J2,
J24,
J6,
J64
Research Theme(s):
Monetary policy,
Monetary policy framework and transmission,
Real economy and forecasting,
Structural challenges,
Demographics and labour supply