Template-Type: ReDIF-Paper 1.0
Title: Heterogeneous consumers, segmented asset markets,and the effects of monetary policy 
Author-Name: Zeno Enders
Author-Email: zeno.enders@uni-bonn.de
Classification-JEL: E31, E32, E51
Keywords: Segmented Asset Markets, Monetary Policy, CountercyclicalMarkups
	Liquidity Effect, Limited Participation 
Abstract: This paper examines the implications of segmented assets markets for the real and nominal
	effects of monetary policy. I develop a model, in which varieties of consumption bundles are
	purchased sequentially. Newly injected money thus disseminates slowly through the economy
	via second-round effects and induces a non-degenerate, long-lasting heterogeneity in wealth.
	As a result, the effective elasticity of substitution differs across households, affecting optimal
	markups chosen by producers. In line with empirical evidence, the model predicts a short-term
	inflation-output trade-off, a liquidity effect, countercyclical markups, and procyclical profits and
	wages after monetary shocks.  
Note: 
Length: 24
Creation-Date: 2010-04
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse08_2010.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse08_2010