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Working Paper
Monetary Policy with Racial Inequality
I develop a heterogeneous-agent New-Keynesian model featuring racial inequality in income and wealth, and studies interactions between racial inequality and monetary policy. Black and Hispanic workers gain more from accommodative monetary policy than White workers mainly due to higher labor market risks. Their gains are larger also because of a larger proportion of them are hand-to-mouth, while wealthy White workers gain more from asset price appreciation. Monetary and fiscal policies are substitutes in providing insurance against cyclical labor market risks. Racial minorities gain even more ...
Working Paper
Monetary Policy and Racial Inequality
This paper aims at an improved understanding of the relationship between monetary policy and racial inequality. We investigate the distributional effects of monetary policy in a unified framework, linking monetary policy shocks both to earnings and wealth differentials between black and white households. Specifically, we show that, although a more accommodative monetary policy increases employment of black households more than white households, the overall effects are small. At the same time, an accommodative monetary policy shock exacerbates the wealth difference between black and white ...
Working Paper
Wealth distribution with state-dependent risk aversion
Working Paper
Price Level Risk and Some Long-Run Implications of Alternative Monetary Policy Strategies
This note focuses on the longer-run implications of alternative monetary policy strategies for the evolution of the price level. The analysis compares the properties of optimal policy in regimes ranging from pure inflation targeting (IT), to a form of weighted-average inflation targeting (WAIT), to pure price level targeting (PLT). Strategies such as WAIT and PLT tend to limit the downward drift in the path of the price level and also mitigate the uncertainty surrounding the expected path of the price level. The influence of alternative monetary policy strategies on the evolution of the price ...
Working Paper
A Wealth of Information: Augmenting the Survey of Consumer Finances to Characterize the Full U.S. Wealth Distribution
We use the Survey of Consumer Finances (SCF) to advance U.S. wealth analysis along several dimensions. We develop a comprehensive framework that modifies the SCF to recover the wealth distribution over families, tax units, and individuals from 1989 to 2019. We show that, by ignoring unequal holdings within families, existing estimates considerably understate U.S. inequality across individuals. We find wealth concentration rose through the recent economic recovery, which differs from leading models that capitalize income into wealth even after aligning conceptual differences. We illustrate ...
Journal Article
Wealth inequality among the Forbes 400 and U.S. households overall
While widening income inequality in the United States has garnered much public and academic attention in recent years, wealth inequality reveals an even starker picture. For instance, in 2010, the top 1 percent of income earners received 19.8 percent of total household income. In the same year, the wealthiest 1 percent held 35.4 percent of total household wealth (Kaplan 2013). Moreover, wealth inequality has increased in recent decades, with most gains concentrated among the richest 20 percent of households (Wolff 2013).
Working Paper
Introducing the Distributional Financial Accounts of the United States
This paper describes the construction of the Distributional Financial Accounts (DFAs), a new dataset containing quarterly estimates of the distribution of U.S. household wealth since 1989, and provides the first look at the resulting data. The DFAs build on two existing Federal Reserve Board statistical products --- quarterly aggregate measures of household wealth from the Financial Accounts of the United States and triennial wealth distribution measures from the Survey of Consumer Finances --- to incorporate distributional information into a national accounting framework. The DFAs complement ...