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α: calibrated so average coauthorship-adjusted count equals average raw count
Monetary shocks have distributional consequences if they affect relative prices across goods consumed by different households. We document that the prices of the goods consumed by high-income households are stickier and less volatile than those of the goods consumed by middle-income households. Following a monetary policy shock, the estimated impulse responses of high-income households’ consumer price indices are about one-third smaller than those of the middle-income households. We evaluate the implications of these findings in a quantitative multi-sector New–Keynesian model featuring heterogeneous households. The distributional consequences of monetary policy shocks are large and similar to those in the econometric model.