BoE paper identifies strong habit-formation in savings

Bank of England

A Bank of England paper published on Monday finds evidence of a policy bias in models that do not fully capture changes in the savings preferences of households facing external shocks.

Michael Hatcher, the paper's author, uses a simple New Keynesian model to analyse the conduct of monetary policy in an environment where households' desire to accumulate savings is driven by shocks to the economy. The authors note that a key task for monetary policy is to understand the transmission mechanism of

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: