Descripción

There is important heterogeneity among households, firms, and banks; and the way shocks or policies affect these agents depends critically on that heterogeneity. There was a rapid surge in the awareness of academic researchers and policymakers of the nexus between heterogeneity and monetary policy, with the emergence of a new class of models subsequently known as HANK, an acronym for heterogeneous-agent new Keynesian. The HANK models combine two long-standing traditions of macroeconomic theory: (i) the new Keynesian approach to the study of business cycles and stabilization policies and (ii) the heterogeneous-agent incomplete market approach to the study of the wealth distribution and of those policies that offer social insurance, promote income mobility, and redistribute income across households. This volume focuses on the role of heterogeneity in macroeconomics and its implications for monetary policy in general and Chile in particular. Understanding the heterogeneous micro implications of a given macro aggregate shock can improve our knowledge of how the economy works and help us forecast its future evolution.

Editors

Sofía Bauducco
Andrés Fernández
Giovanni L. Violante

Endorsements

The HANK revolution has been one of the most important developments in modern macroeconomics. This brilliant set of papers from a brilliant set of authors spells out the implications for monetary and fiscal policy. If you want to catch up to the frontier of this literature, you will want this volume.
Mark Gertler
New York University

The contributors to this book are the leading researchers on HANK models and their implications for the monetary policy transmission. Every student and central banker will want to read this outstanding collection of articles.
Monika Piazzesi
Stanford University

This collection of papers showcases both how the HANK machinery already can be used very productively in concrete applications and that it still offers much room for breaking new conceptual ground.
Per Krusell
Stockholm University

“Heterogeneity in Macroeconomics: Implications for Monetary Policy” provides an impressive overview of recent developments in this fast-growing literature, with eight insightful articles written by some of its key contributors. The volume’s introduction as well as Sargent’s keynote paper both masterfully place HANK models in the history of macroeconomic thought and should be required reading for both academic macroeconomists and practitioners at central banks.
Benjamin Moll
Sir John Hicks Professor of Economics, London School of Economics