C02: Public interventions in asset markets

This project studies monetary policy interventions in the context of heterogeneity in product and asset markets. The project develops new empirical strategies to understand the role of price distortions, markups and marginal costs in driving price trends. We will also quantify to what extent inefficient inflation levels generate price distortions and study inflation measurement when product turnover and prices display seasonal patterns.

The project also aims at a better understanding of the effects of conventional and unconventional monetary policies on asset markets and, in the face of heterogeneous portfolios, on the wealth distribution. The project will use novel identification strategies and long-run macrodata to identify the effects and channels of monetary policy on prices, risk premia, and their synchronization across asset markets. We will also study the effects of unconventional monetary policy such as foreign exchange interventions and balance sheet expansions, and develop a framework to evaluate their macroeconomic and financial effects jointly.