Monetary policy, fisal federalism, and capital intensity

Working paper

Can monetary policy shocks induce redistribution across natural resource rich and poor economies within a union? Resource-rich economies are more capital intensive. A two-region monetary union DSGE model with an equalizing fiscal rule and heterogeneity in capital intensity shows that positive monetary policy shocks induce redistribution from the capital-scarce region to its capital-rich counterpart because investment contracts more strongly in the latter. These patterns persist over the mediu...

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Authors: Raveh, O

• Publication status: Published
• Publisher: University of Oxford Publisher's website
• Series: OxCarre Papers
• Publication date: 2016-11-23
• Paper number: 181
• Keywords: naturalresources; redistribution; monetarypolicy