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DESCRIPTION;ENCODING=QUOTED-PRINTABLE:Xavier Ragot (Sciences Po, CNRS, OFCE) - Should monetary policy care about redistribution? Optimal fiscal and monetary policy with heterogeneous agents =0D=0A Co-authors: François Le Grand (Emlyon Business School and ETH) and Alaïs Martin-Baillon (Sciences Po) =0D=0A Abstract We derive optimal monetary and fiscal policies in a heterogeneous-agent economy with nominal frictions and aggregate shocks, and allowing for a rich set of fiscal tools. We first theoretically show that when linear taxes on capital and labor are available, there is no redistributive role for monetary policy: monetary policy solely implements price stability. Second, when fiscal tools are incomplete, we find that optimal deviation from price stability is quantitatively very small when the economy is running for a long time, i.e. in a timeless perspective. Redistribution is then mostly a matter of fiscal policy. When fiscal tools are missing, there can be a significant though temporary deviation from price stability when we consider a time-0 problem where the planner is not constrained by past commitment. We provide analytical results using an extended Lagrangian approach applied to incomplete market models. Quantitative results are derived thanks to a truncated representation of incomplete-market models, which provides a relevant tractable environment.=0D=0A  =0D=0A Online Research seminars organized by the Bank of Finland's Research Unit are open to all researchers interested in the subjects covered. Those wishing to attend a seminar are kindly asked to register in advance, by filling in the  Online Registration Form =0D=0A  The registration for each seminar is open until 9:00 am the day of the seminar. You will receive a link to join the seminar by email at the latest one hour before the seminar is scheduled to begin  =0D=0A
DTEND:20210506T084500Z
DTSTAMP:20210409T125832Z
DTSTART:20210506T073000Z
LOCATION:Teams meeting
SUMMARY:Research seminar - Xavier Ragot (Sciences Po) - Should monetary policy care about redistribution? Optimal fiscal and monetary policy with heterogeneous agents

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