During the COVID-19 pandemic, governments in the euro area sharply increased spending while the European Central Bank eased financing conditions. We use this episode to assess how such a concerted monetary-fiscal stimulus redistributes welfare between various age cohorts. Our assessment involves...

It is well-known that central bank policies affect not only macroeconomic aggregates, but also their distribution across economic agents. Similarly, a number of papers demonstrated that heterogeneity of agents may matter for the transmission of monetary policy on macro variables. Despite this,...

We study the working of monetary policy in an estimated two-country model with behavioral expectations (BE). We first show that the data favors this setting compared with the standard rational expectations assumption. Then we document several novel findings related to monetary policy in the...