TY - JOUR
T1 - Housing, Wealth Effects, and Monetary Policy
AU - Kim, Kwang Hwan
AU - Katayama, Munechika
N1 - Copyright:
Copyright 2013 Elsevier B.V., All rights reserved.
PY - 2013/3
Y1 - 2013/3
N2 - This paper examines the role that wealth effects on labour supply play in a two-sector sticky-price model that includes non-durables and housing. Careful analysis of a two-sector sticky-price model reveals that whether there are wealth effects on labour supply fundamentally changes the nature of the model in a way that has not been fully appreciated. In the presence of wealth effects on labour supply, as Barsky et al. study demonstrate, the pricing of housing is central to the behaviour of the model, whereas price rigidity in the non-durable goods sector is much less important. In the absence of these wealth effects, by contrast, the behaviour of the model depends critically on whether the non-durable goods, not the new housing, themselves have sticky prices.
AB - This paper examines the role that wealth effects on labour supply play in a two-sector sticky-price model that includes non-durables and housing. Careful analysis of a two-sector sticky-price model reveals that whether there are wealth effects on labour supply fundamentally changes the nature of the model in a way that has not been fully appreciated. In the presence of wealth effects on labour supply, as Barsky et al. study demonstrate, the pricing of housing is central to the behaviour of the model, whereas price rigidity in the non-durable goods sector is much less important. In the absence of these wealth effects, by contrast, the behaviour of the model depends critically on whether the non-durable goods, not the new housing, themselves have sticky prices.
KW - Sticky prices
KW - durables
KW - neutrality
UR - http://www.scopus.com/inward/record.url?scp=84875292224&partnerID=8YFLogxK
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U2 - 10.1080/1226508X.2013.769815
DO - 10.1080/1226508X.2013.769815
M3 - Article
AN - SCOPUS:84875292224
VL - 42
SP - 55
EP - 71
JO - Global Economic Review
JF - Global Economic Review
SN - 1226-508X
IS - 1
ER -