Out of many, one? Household debt, redistribution and monetary policy during the economic slump

BIS speech  | 
28 June 2015
by  Amir Sufi
PDF full text
 |  25 pages

Andrew Crockett Memorial Lecture, delivered by Mr Amir Sufi, Professor of Finance, University of Chicago, on the occasion of the Bank's Annual General Meeting, Basel, 28 June 2015. This lecture was followed by a panel discussion on "Monetary policy and household demand". 


High-income and low-income individuals respond very differently to monetary policy shocks, as do savers and borrowers. Monetary policy has been especially weak in advanced economies over the past seven years because the redistribution channels of monetary policy have been severely hampered. Recognising the importance of such channels can guide central bankers on what monetary policies are most likely to be effective: the same policy may have different effects on the real economy depending on the distribution of debt capacity across individuals.