Monetary policy and inequality under labor market frictions and capital-skill complementarity

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dc.contributor.author Pappa, Evi
dc.contributor.author Dolado, Juan José
dc.contributor.author Motyovszki, Gergo
dc.date.accessioned 2022-05-11T18:16:57Z
dc.date.available 2022-05-11T18:16:57Z
dc.date.issued 2021-04-02
dc.identifier.bibliographicCitation Dolado, J. J., Motyovszki, G., & Pappa, E. (2021). Monetary policy and inequality under labor market frictions and capital-skill complementarity. American Economic Journal: Macroeconomics, 13 (2), pp. 292-332.
dc.identifier.issn 1945-7707
dc.identifier.uri http://hdl.handle.net/10016/34784
dc.description.abstract We provide a new channel through which monetary policy has distributional consequences at business cycle frequencies. We show that an unexpected monetary easing increases labor income inequality between high-skilled and less-skilled workers. To rationalize these f indings, we build a New Keynesian DSGE model with asymmetric search-and-matching (SAM) frictions and capital-skill complementarity (CSC) in production. We show that CSC on its own introduces a dynamic demand amplification mechanism: the increase in high-skilled employment after a monetary expansion makes complementary capital more productive, encouraging a further rise in investment demand and creating a multiplier effect. SAM asymmetries magnify this channel.
dc.description.sponsorship We gratefully acknowledge financial support from the EUI (research grant IE-54) and the Spanish Ministerio de Economía y Competitividad (grant ECO2016-78652).
dc.language.iso eng
dc.publisher American Economic Association
dc.rights © American Economic Association
dc.subject.other Monetary policy
dc.subject.other Search and matching
dc.subject.other Capital-skill complementarity
dc.subject.other Inequality
dc.title Monetary policy and inequality under labor market frictions and capital-skill complementarity
dc.type article
dc.subject.jel E32
dc.subject.jel E52
dc.subject.jel E24
dc.subject.jel E12
dc.subject.jel E25
dc.subject.jel J63
dc.subject.eciencia Economía
dc.identifier.doi https://doi.org/10.1257/mac.20180242
dc.rights.accessRights openAccess
dc.relation.projectID Gobierno de España. ECO2016-78652-P
dc.type.version publishedVersion
dc.identifier.publicationfirstpage 292
dc.identifier.publicationissue 2
dc.identifier.publicationlastpage 332
dc.identifier.publicationtitle American Economic Journal-Macroeconomics
dc.identifier.publicationvolume 13
dc.identifier.uxxi AR/0000029310
dc.contributor.funder Ministerio de Economía y Competitividad (España)
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