No. Even if firms reset their prices more frequently when they face higher uncertainty, monetary policy may not be less effective in boosting real activity when firms become less responsive to monetary policy. In this case, the real effect of monetary policy can be strengthened even though they...

This paper focuses on a labor-supply-side story for the monetary transmission mechanism, which has received relatively little attention in the New Keynesian literature. To this end, I develop a heterogeneous-agent New Keynesian (HANK) economy where a nonlinear mapping from hours worked into...

It is well-known that real wages are procyclical conditional on a monetary policy shock. This paper challenges this conventional view by using a quantitative heterogeneous-agent New Keynesian economy with sticky wages. In the model with benchmark calibration, the wage rate per effective unit of...