Abstract We study the distributional and welfare implications of U.S. monetary policy shocks in a small open economy under the classic rules of an exchange rate peg and inflation targeting. In a model with heterogenous agents, we show that contractionary (expansionary) monetary policy shocks in...

We extend a simple Dynamic Stochastic General Equilibrium (DSGE) model with segmented financial markets to include financial repression and examine its impact on the transmission of conventional and unconventional monetary policies. In our model, financial repression arises as the government...

The empirical evidence on how monetary policy affects inequality is mixed. We propose a model with endogenously segmented financial markets which can reconcile this contrasting em- pirical evidence. In addition to the conventional income composition channel (intensive margin), monetary policy in...