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Monetary Policy Surprises and Inflation Expectations
The private sector may slightly underestimate the short-term impact of monetary policy surprises on inflation but may predict longer-term effects fairly well.
Which U.S. Households Have Credit Card Debt?
Households carrying credit card balances tend to be middle income, but the ratio of credit card debt to income is highest among those who earn the least.
Working Paper
Asset supply and liquidity transformation in HANK
We study how the financial sector affects fiscal and monetary policy in heterogeneous agent New Keynesian (HANK) economies. We show that, in a large class of models of financial intermediation, relevant features of the financial sector are summarized by the elasticities of a liquid asset supply function. The financial sector in these models affects aggregate responses only through its ability to perform liquidity transformation (i.e., issue liquid assets to finance illiquid capital). If liquid asset supply responds inelastically to returns on capital (low cross-price elasticities), ...
Journal Article
Developments in Household Liabilities Since the 1990s
The ratio of household liabilities to income increased from the mid 1990s to 2010, driven by an increase in the supply of loans that outpaced loan demand.
Which Households Are Most Exposed to the Inflation “Tax”?
The federal government benefits from unexpected bouts of inflation since the real value of its debt falls. However, this also hurts its debtholders.
Journal Article
Assets and Liabilities of Younger vs. Older Households
The balance sheets of US households have changed over the past seven decades, overall and for different age groups.
Working Paper
Financial Intermediation and Aggregate Demand: A Sufficient Statistics Approach
We provide a unified framework to study how the financial sector affects the transmission of macroeconomic policies, such as monetary and fiscal policies, and asset purchase programs. Our framework nests models of financial intermediation with various microfoundations and allows for rich household heterogeneity. The financial sector supplies liquidity by issuing liquid assets to finance illiquid capital. The elasticities of liquidity supply with respect to returns are sufficient statistics that summarize how the financial sector determines responses to policy through asset markets. This asset ...
Which Households Prefer ARMs vs. Fixed-Rate Mortgages?
Adjustable-rate mortgages appear to be more popular with younger, higher-income households that also have bigger mortgages, according to 2019 data.
Working Paper
Attention and Fluctuations in Macroeconomic Uncertainty
I show that economic agents’ attention to macroeconomic events can increase macroeconomic uncertainty during recessions. Agents face uncertainty about the aggregate state of the economy, receive dispersed information about it, and can pay attention to acquire more information. When the economy is in a bad state, agents choose to pay more attention, and their collective response increases three common measures of uncertainty: (i) aggregate output volatility, (ii) forecast dispersion about output, and (iii) subjective uncertainty about output. Uncertainty driven by agents’ attention implies ...
How Does Human Capital Affect Wealth Inequality?
Accounting for human capital can change the distribution of wealth and some common measures of wealth inequality.