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The Cambridge-INET Institute - continuing as the Janeway Institute


Heterogeneity and Monetary Policy after COVID-19 Mini Conference

The first virtual Cambridge mini-conference on "Heterogeneity and Monetary Policy after COVID-19" took place on 3 November 2020, with more than 100 participants joining online. Organised by Prof. Giancarlo Corsetti and Lukas B. Freund and supported by the Faculty of Economics, Cambridge INET and the Centre for Macroeconomics, the conference addressed the multidirectional relationship between inequality, business cycles and monetary policy.

The significance of this nexus of topics is starkly illustrated by the unequal economic impact of COVID-19, but was top of mind for policymakers and researchers alike already prior to the pandemic. Thus, over recent years, a new suite of macroeconomic models has emerged that give centre stage to household heterogeneity while allowing for monetary policy to influence the trajectory of the real economy.

Starting off the mini-conference, Marco Del Negro (Federal Reserve Bank New York) explained how a rich heterogeneous -agent model of this kind can be empirically disciplined through estimation on both micro and macro data. The paper suggests that the degree of inequality is very important in terms of the dynamics of the macroeconomy. Next, Corina Boar (New York University) examined who exactly the 'hand-to-'mouth' households are, the presence of which drives the properties of models with household heterogeneity in important ways. The presentation documented an important role for preference heterogeneity in explaining differences in consumption propensities cross households. Finally, Benjamin Moll (London School of Economics) demonstrated how the incorporation of insights from behavioural economics alters our understanding of the effect of monetary and fiscal policy. A key result is that present bias tends to amplify the potency of fiscal as well as monetary stimulus; at the same time it slows down the speed of monetary transmission.

Building on the these presentations and the lively discussions during Q&A sessions, the mini-conference concluded with a general discussion that consolidated central themes emerging from these research papers and highlighted central, open questions for researchers thinking about monetary policy in a post-pandemic world.

Organised by: Giancarlo Corsetti (Cambridge) and Lukas Freund (Cambridge)

Venue: The conference will be held via Zoom

Event Date: Tuesday 3rd November 2020

Time: 02:00pm - 05:00pm

Corina Boar (NYU)
Benjamin Moll (LSE)
Marco Del Negro (NY Fed)

See programme for full details

Registration is closed

Event Contacts:
Lukas Freund - and Marion Reusch -



Monetary Policy


Theme: transmission