Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy

The main objective of this paper is to analyze the impact of countercyclical fiscal rules on monetary policy transmission channels. Using a model with portfolio heterogeneity and aggregate uncertainty as a basis, it is shown that unexpected shocks on nominal interest rate induce effects on the co...

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Autor principal: Kossacoff, Ramiro V.
Otros Autores: Macera, Manuel
Formato: Tesis de maestría acceptedVersion
Lenguaje:Inglés
Publicado: Universidad Torcuato Di Tella 2024
Materias:
Monetary and Fiscal Policy
Heterogeneous Agents
General Equilibrium
Acceso en línea:https://repositorio.utdt.edu/handle/20.500.13098/12604
Aporte de:
Repositorio Digital Universidad Torcuato Di Tella de Universidad Torcuato Di Tella
id I57-R163-20.500.13098-12604
record_format dspace
spelling I57-R163-20.500.13098-126042024-04-16T07:00:38Z Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy Kossacoff, Ramiro V. Macera, Manuel Monetary and Fiscal Policy Heterogeneous Agents General Equilibrium The main objective of this paper is to analyze the impact of countercyclical fiscal rules on monetary policy transmission channels. Using a model with portfolio heterogeneity and aggregate uncertainty as a basis, it is shown that unexpected shocks on nominal interest rate induce effects on the composition of income across the wealth distribution. In this context, a fiscal policy rule aimed at reducing the procyclicality of government spending in recessionary contexts through debt issuance (i.e., a countercyclical fiscal rule) helps to mitigate these distributional effects. This result is associated with the fact that the increase in the supply of bonds generates changes in their expected return –impacting households’ consumption and portfolio decisions–, which alters the transmission of monetary shocks on income. On the other hand, the conclusions presented in this paper lay the foundations for future analyses aimed at studying the trade–off between monetary policy stabilization and its distributional consequences. 2024-04-15T21:48:32Z 2024-04-15T21:48:32Z 2023 info:eu-repo/semantics/masterThesis info:ar-repo/semantics/tesis de maestría info:eu-repo/semantics/acceptedVersion https://repositorio.utdt.edu/handle/20.500.13098/12604 eng info:eu-repo/semantics/openAccess https://creativecommons.org/licenses/by-sa/2.5/ar/ 21 p. application/pdf application/pdf Universidad Torcuato Di Tella
institution Universidad Torcuato Di Tella
institution_str I-57
repository_str R-163
collection Repositorio Digital Universidad Torcuato Di Tella
language Inglés
orig_language_str_mv eng
topic Monetary and Fiscal Policy
Heterogeneous Agents
General Equilibrium
spellingShingle Monetary and Fiscal Policy
Heterogeneous Agents
General Equilibrium
Kossacoff, Ramiro V.
Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy
topic_facet Monetary and Fiscal Policy
Heterogeneous Agents
General Equilibrium
description The main objective of this paper is to analyze the impact of countercyclical fiscal rules on monetary policy transmission channels. Using a model with portfolio heterogeneity and aggregate uncertainty as a basis, it is shown that unexpected shocks on nominal interest rate induce effects on the composition of income across the wealth distribution. In this context, a fiscal policy rule aimed at reducing the procyclicality of government spending in recessionary contexts through debt issuance (i.e., a countercyclical fiscal rule) helps to mitigate these distributional effects. This result is associated with the fact that the increase in the supply of bonds generates changes in their expected return –impacting households’ consumption and portfolio decisions–, which alters the transmission of monetary shocks on income. On the other hand, the conclusions presented in this paper lay the foundations for future analyses aimed at studying the trade–off between monetary policy stabilization and its distributional consequences.
author2 Macera, Manuel
author_facet Macera, Manuel
Kossacoff, Ramiro V.
format Tesis de maestría
Tesis de maestría
acceptedVersion
author Kossacoff, Ramiro V.
author_sort Kossacoff, Ramiro V.
title Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy
title_short Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy
title_full Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy
title_fullStr Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy
title_full_unstemmed Optimal Portfolio Choices and the Fiscal Channel of Monetary Policy
title_sort optimal portfolio choices and the fiscal channel of monetary policy
publisher Universidad Torcuato Di Tella
publishDate 2024
url https://repositorio.utdt.edu/handle/20.500.13098/12604
work_keys_str_mv AT kossacofframirov optimalportfoliochoicesandthefiscalchannelofmonetarypolicy
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