Work

Monetary policy over the lifecycle

Year: 2025

Type: article

Abstract: We propose a quantitative model of monetary policy over the lifecycle with endogenous portfolio choices. Our model reproduces the average age profiles of asset portfolios, the empirical responses of aggregate variables, and the microeconomic responses of different age groups to a tightening in monetary policy. Households disagree about the benefits of a tighter monetary policy. Consumption and welfare of older age groups increase, but consumption and welfare of younger households fall.

Source: Review of Economic Dynamics

DOI: 10.1016/j.red.2025.101274

Authors: R. Anton Braun, Daisuke Ikeda

Institutions: National Graduate Institute for Policy Studies, Bank of Japan

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,320

Funder: Japan Society for the Promotion of Science