Acharya, Sushant; Pesenti, Paolo A. - 2024
We study international monetary policy spillovers and spillbacks in a tractable two-country Heterogeneous Agent New … propensities to consume (MPC). While both channels amplify the size of spillovers/spillbacks, only precautionary savings can change … their sign relative to RANK. Spillovers are likely to be larger in economies with higher fractions of high MPC households …