DISINFLATION, INEQUALITY, AND WELFARE IN A TANK MODEL.
We investigate the redistributive and welfare effects of disinflation in a two‐agent New Keynesian model characterized by limited asset market participation and wealth inequality. We highlight two key mechanisms driving our long‐run results: (1) the cash in advance constraint on firms working capita...
| Publicado en: | Economic Inquiry Vol. 58; no. 3; pp. 1297 - 1314 |
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| Autores principales: | , |
| Formato: | Artículo |
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Wiley-Blackwell
Jul2020
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=143422817&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 143422817 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Jul2020 vid: 58 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 143422817 10.1111/ecin.12870 ppf: 1297 ppct: 17 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 429KB tig: atl: DISINFLATION, INEQUALITY, AND WELFARE IN A TANK MODEL. aug: au: Tirelli, Patrizio Ferrara, Maria affil: Department of Economics and Management, University of Pavia, Pavia 27100,, Italy Department of Economics and Legal Studies, University of Naples Parthenope, Napoli 80132,, Italy su: Keynesian economics Labor demand Price deflation Working capital Dividends sug: subj: Keynesian economics Labor demand Price deflation Working capital Dividends ab: We investigate the redistributive and welfare effects of disinflation in a two‐agent New Keynesian model characterized by limited asset market participation and wealth inequality. We highlight two key mechanisms driving our long‐run results: (1) the cash in advance constraint on firms working capital; (2) dividends endogeneity. These two channels point in opposite directions. Lower inflation softens the cash in advance constraint and, by raising labor demand, lowers inequality. But disinflation also raises dividends and this increases inequality. The disinflation is always welfare‐improving for asset holders. We obtain ambiguous results for non‐asset holders, who suffer substantial consumption losses during the transition. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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