nep-upt New Economics Papers
on Utility Models and Prospect Theory
Issue of 2020‒08‒10
twenty-two papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Strategic Problems with Risky Prospects By Alessandro Sontuoso; Christina Bicchieri; Alexander Funcke; Einav Hart
  2. An Efficient Revealed Preference Test for the Maxmin Expected Utility Model By Thomas Demuynck; Clément Staner
  3. Objective rationality foundations for (dynamic) alpha-MEU By Mira Frick; Ryota Iijima; Yves Le Yaouanq
  4. The Rational Group By Franz Dietrich
  5. Value of Life and Annuity Demand By Pashchenko, Svetlana; Porapakkarm, Ponpoje
  6. Portfolio choice with time horizon risk By Alexis Direr
  7. Dutch versus First-Price Auctions with Dynamic Expectations-Based Reference-Dependent Preferences By Benjamin Balzer; Antonio Rosato; Jonas von Wangenheim
  8. Revealed Deliberate Preference Changes By Boissonnet, Niels; Ghersengorin, Alexis; Gleyze, Simon
  9. Savage's response to Allais as Broomean reasoning By Franz Dietrich; Antonios Staras; Robert Sugden
  10. Asset bubble and endogenous labor supply: a clarification By Kathia Bahloul Zekkari; Thomas Seegmuller
  11. Bundlers Dilemmas in Financial Markets with Sampling Investors By Milo Bianchi; Philippe Jehiel
  12. Price Index Numbers Under Large-Scale Demand Shocks: The Japanese Experience of the COVID-19 Pandemic By Abe, Naohito; Inoue, Toshikatsu; Sato, Hideyasu
  13. Identification of preferences, demand and equilibrium with finite data By Kubler, Felix; Malhotra, Raghav; Polemarchakis, Herakles
  14. Risk framing and business model adaptation: A conceptualization based on threat-rigidity theory By Aarøen, Camilla; Selart, Marcus
  15. A Theory of Intuition and Contemplation By Benjamin Balzer; Benjamin Young
  16. Standard vs random dictator games. The effect of role uncertainty on generosity By Ernesto Mesa-Vázquez; Ismael Rodriguez-Lara; Amparo Urbano
  17. Classical versus Neoclassical Equilibrium Discovery Processes in Market Supply and Demand Theory By Sabiou M. Inoua; Vernon L. Smith
  18. Uncertainty and decision-making during a crisis: How to make policy decisions in the COVID-19 context? By Loïc Berger; Nicolas Berger; Valentina Bosetti; Itzhak Gilboa; Lars Peter Hansen; Christopher Jarvis; Massimo Marinacci; Richard D. Smith
  19. Trust and Trustworthiness After Negative Random Shocks By Hernán Bejarano; Joris Gillet; Ismael Rodriguez-Lara
  20. Lookahead and Hybrid Sample Allocation Procedures for Multiple Attribute Selection Decisions By Jeffrey W. Herrmann; Kunal Mehta
  21. How Might Climate Change Influence farmers' Demand for Index-Based Insurance? By Antoine Leblois; Tristan Le Cotty; Elodie Maître d'Hôtel
  22. Has monetary policy made you happier? By Bunn, Philip; Haldane, Andrew; Pugh, Alice

  1. By: Alessandro Sontuoso (Smith Institute for Political Economy and Philosophy, Chapman University; Center for Social Norms and Behavioral Dynamics, University of Pennsylvania); Christina Bicchieri (Center for Social Norms and Behavioral Dynamics, University of Pennsylvania); Alexander Funcke (Center for Social Norms and Behavioral Dynamics, University of Pennsylvania); Einav Hart (Center for Social Norms and Behavioral Dynamics, University of Pennsylvania)
    Abstract: We study games where the impact of strategic uncertainty (i.e., ambiguity arising from uncertainty about other players’ actions and beliefs) is compounded by the simultaneous presence of risky prospects (chance moves with commonly-known conditional probabilities). We embed such games in an experimental environment that allows us to test if risk-taking behavior is affected by information that reduces the extent of strategic uncertainty. In doing so, we test some implications of expected utility theory, while making minimal assumptions about individual-level (risk or ambiguity) attitudes. Our analysis provides evidence for an effect of the information: notably, we find that the effect on choice behavior is triggered in some cases by a rational belief revision about others’ actions, and in other cases by a reversal in risk preferences.
    Keywords: Strategic Uncertainty; Risk Preferences; Belief Revision; Mixed-Motive games; Network
    JEL: C72 C92 D81 D83
    Date: 2020
  2. By: Thomas Demuynck; Clément Staner
    Abstract: We develop a revealed preference approach for the maxmin expected utility model. In contrast to the existing tests in the literature, our revealed preference test can be efficiently implemented and does not rely on a grid search over the set of possible priors. We illustrate the usefulness of our results by implementing our revealed preference tests on two experimental datasets from the literature and we compare the empirical fit of the max-min expected utility model with the subjective expected utility model.
    Keywords: Revealed preference theory; Maxmin expected utility; Subjective expected utility
    JEL: C14 C60 D11 D12 D81
    Date: 2020–07
  3. By: Mira Frick (Cowles Foundation, Yale University); Ryota Iijima (Cowles Foundation, Yale University); Yves Le Yaouanq (Ludwig-Maximilians-Universit‰t, Munich)
    Abstract: We show how incorporating Gilboa, Maccheroni, Marinacci, and Schmeidler’s (2010) notion of objective rationality into the alpha-MEU model of choice under ambiguity (Hurwicz, 1951) can overcome several challenges faced by the baseline model without objective rationality. The decision-maker (DM) has a subjectively rational preference $\succsim^\wedge$, which captures the complete ranking over acts the DM expresses when forced to make a choice; in addition, we endow the DM with a (possibly incomplete) objectively rational preference $\succsim^*$, which captures the rankings the DM deems uncontroversial. Under the objectively founded alpha-MEU model, $\succsim^\wedge$ has an alpha-MEU representation and $\succsim^*$ has a unanimity representation à la Bewley (2002), where both representations feature the same utility index and set of beliefs. While the axiomatic foundations of the baseline alpha-MEU model are still not fully understood, we provide a simple characterization of its objectively founded counterpart. Moreover, in contrast with the baseline model, the model parameters are uniquely identiï¬ ed. Finally, we provide axiomatic foundations for prior-by-prior Bayesian updating of the objectively founded alpha-MEU model, while we show that, for the baseline model, standard updating rules can be ill-deï¬ ned.
    Keywords: Ambiguity, Alpha-MEU, Objective rationality, Updating
    Date: 2020–07
  4. By: Franz Dietrich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CNRS - Centre National de la Recherche Scientifique)
    Abstract: Can a group be a standard rational agent? This would require the group to hold aggregate preferences which maximise expected utility and change only by Bayesian updating. Group rationality is possible, but the only preference aggregation rules which support it (and are minimally Paretian and continuous) are the linear-geometric rules, which combine individual tastes linearly and individual beliefs geometrically.
    Keywords: Bayesian aggregation,preference aggregation under uncertainty,expected utility hypothesis for groups,Bayesian revision,rational group agents,linear versus geneometric opinion pooling
    Date: 2020–06
  5. By: Pashchenko, Svetlana; Porapakkarm, Ponpoje
    Abstract: How does the value of life affect annuity demand? To address this question, we construct a portfolio choice problem with three key features: i) agents have access to life-contingent assets, ii) they always prefer living to dying, iii) agents have non-expected utility preferences. We show that as utility from being alive increases, annuity demand decreases (increases) if agents are more (less) averse to risk rather than to intertemporal fluctuations. Put differently, if people prefer early resolution of uncertainty, they are less interested in annuities when the value of life is high. Our findings have two important implications. First, we get better understanding of the well-known annuity puzzle. Second, we argue that the observed low annuity demand provides evidence that people prefer early rather than late resolution of uncertainty.
    Keywords: annuities, value of a statistical life, portfolio choice problem, life-contingent assets, longevity insurance
    JEL: D91 G11 G22
    Date: 2020–05–30
  6. By: Alexis Direr (LEO - Laboratoire d'Économie d'Orleans - UO - Université d'Orléans - Université de Tours - CNRS - Centre National de la Recherche Scientifique)
    Abstract: I study the allocation problem of investors who hold their portfolio until a target wealth is attained. The strategy suppresses final wealth uncertainty but creates an investment time horizon risk. I begin with a simple mean variance model transposed in the duration domain, then study a dynamic portfolio choice problem with Generalized Expected Discounted Utility preferences. Using long-term US return data, I show in the mean variance model that a large amount of time horizon risk can be diversified away by investing a significant share of equities. In the dynamic model, more impatient investors are also more averse to timing risk and invest less in equities. The equity share is downward trending with accumulated wealth relative to its target. J.E.L. codes: D8, E21
    Keywords: portfolio choice,risk aversion,timing risk
    Date: 2020–06–24
  7. By: Benjamin Balzer (University of Technology Sydney); Antonio Rosato (University of Technology Sydney); Jonas von Wangenheim (University of Bonn, Germany)
    Abstract: We study the behavior of expectations-based loss-averse bidders in Dutch and first-price auctions with independent private values. With loss-averse preferences, the strategic equivalence between these formats no longer holds. Intuitively, as the Dutch auction unfolds, a bidder becomes more optimistic about her chances of winning; this stronger "attachment" effect pushes her to bid more aggressively than in the first-price auction. Thus, Dutch auctions raise more revenue than first-price ones. Indeed, we show that the Dutch auction raises the most revenue among standard auction formats. Our results imply that with expectations- based reference-dependent preferences sequential mechanisms might outperform static ones.
    Keywords: Reference-Dependent Preferences; Loss Aversion; Dutch Auctions; Revenue Equivalence; Personal Equilibrium
    JEL: D44 D81 D82
    Date: 2020–06–01
  8. By: Boissonnet, Niels; Ghersengorin, Alexis; Gleyze, Simon
    Abstract: We propose a model of chosen preferences together with conditions on choice data that falsify and identify our model. Preferences on alternatives are defined on attributes—e.g. candidates for a job may be experienced or inexperienced. Choice behavior is driven by a subset of attributes. Whenever an attribute becomes salient, the decision maker chooses to make it relevant or irrelevant for her future choices—e.g. employers may deliberately ignore race in the future to prevent discrimination. We identify when this decision is based on the maximization of a meta-preference, implying that preference changes are deliberate. This shows that theories of endogenous preferences, motivated reasoning, evolving attention, changing awareness, etc. can be empirically founded. Moreover, the model can rationalize heterogeneity in choice behavior even under the testable hypothesis that agents' preferences and meta-preferences are identical.
    Keywords: Revealed Preference Theory, Reason-Based Choice, Endogenous Preferences, Awareness, Inattention, Changing Tastes
    JEL: D80
    Date: 2020–05–19
  9. By: Franz Dietrich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CNRS - Centre National de la Recherche Scientifique); Antonios Staras (Cardiff University); Robert Sugden (UEA - University of East Anglia [Norwich])
    Abstract: Leonard Savage famously contravened his own theory when first confronting the Allais Paradox, but then convinced himself that the had made an error. We examine the formal structure of Savage's ‘error-correcting' reasoning in the light of (i) behavioural economists' claims to identify the latent preferences of individuals who violate conventional rationality requirements and (ii) John Broome's critique of arguments which presuppose that rationality requirements can be achieved through reasoning. We argue that Savage's reasoning is not vulnerable to Broome's critique, but does not provide support for the view that behavioural scientists can identify and counteract errors in people's choices.
    Keywords: Savage,Allais Paradox,Broome,rationality,reasoning,behavioural economics
    Date: 2020–05
  10. By: Kathia Bahloul Zekkari (Aix-Marseille Univ, CNRS, AMSE, Marseille, France); Thomas Seegmuller (Aix-Marseille Univ, CNRS, AMSE, Marseille, France)
    Abstract: This paper analyzes the link between asset bubbles, endogenous labor and capital. The question is whether endogenous labor, per se, can explain a crowding-in effect of the bubble, i.e. higher levels of capital and labor. With respect to the existing literature, our contribution is twofold. First, we explicitly and theoretically derive the conditions to have a crowding-in effect of the bubble. Second, the utility function we consider allows us to show that this result does not require an arbitrarily high elasticity of intertemporal substitution in consumption. Our result still holds for a unit value of this elascticity (Cobb-Douglas utility).
    Keywords: asset bubbles, crowding-in effect, endogenous labor, overlapping generations
    JEL: E22 E44 J22
    Date: 2020–07
  11. By: Milo Bianchi (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Philippe Jehiel (PSE - Paris School of Economics)
    Abstract: We study banks' incentive to pool assets of heterogeneous quality when investors evaluate pools by extrapolating from limited sampling. Pooling assets of heterogeneous quality induces dispersion in investors' valuations without affecting their average. Prices are determined by market clearing assuming that investors can neither borrow nor short-sell. A monopolistic bank has the incentive to create heterogeneous bundles only when investors have enough money. When the number of banks is sufficiently large, oligopolistic banks choose extremely heterogeneous bundles, even when investors have little money and even if this turns out to be collectively detrimental to the banks. If, in addition, banks can originate low quality assets, even at a cost, this collective inefficiency is exacerbated and pure welfare losses arise. Robustness to the presence of rational investors and to the possibility of short-selling is discussed.
    Keywords: Complex financial products,Bounded rationality,Disagreement,Market efficiency,Sampling
    Date: 2020–05
  12. By: Abe, Naohito; Inoue, Toshikatsu; Sato, Hideyasu
    Abstract: This study examines the effects of the coronavirus disease 2019 (COVID-19) pandemic on consumer price indices using Japanese face mask scanner data. We show that the COVID-19 pandemic causes a shift in consumers’ preferences to a large extent, and the Paasche index becomes greater than the Laspeyres index. When large-scale changes in preferences occur, the standard superlative index, such as the Fisher or Tornqvist indices, are hard to be regarded as the cost of living index (COLI) defined based on consumer theory. Using a recently developed index number formula that is exact for the constant elasticity of the substitution utility function with variable preferences, we quantify the degree of the demand shock caused by the COVID-19 pandemic. We also show that shifts in preferences are so large that by incorporating the changes in preferences, the COLI becomes very different from the standard superlative indices. While the prices of face masks became lower in the Fisher index in May 2020 by 0.76% per week, the COLI increased by 1.92% per week. The magnitude of the bias caused by the demand shock is so substantial that traditional index numbers might carry the wrong information on the cost of living among consumers.
    Keywords: COVID-19, Pandemic, Coronavirus, Price Index, Demand shocks
    Date: 2020–07
  13. By: Kubler, Felix (University of Zurich); Malhotra, Raghav (University of Warwick); Polemarchakis, Herakles (University of Warwick)
    Abstract: We give conditions under which an individual's preferences can be identified with finite data. First, we derive conditions that guarantee that a finite number of observations of an individual's binary choices identify preferences over an arbitrarily large subset of the choice space and allow one to predict how the individual shall decide when faced with choices not previously encountered. Second, we extend the argument to observations of individual demand. Finally, we show that nitely many observations of Walrasian equilibrium prices and pro les of individual endowments suffice to identify individual preferences and, as a consequence, equilibrium comparative statics.
    Keywords: identification ; finite data ; preferences ; choices ; demand ; Walrasian equilibrium JEL codes: D80 ; G10
    Date: 2020
  14. By: Aarøen, Camilla; Selart, Marcus
    Abstract: Firm leaders’ inclination to adapt their business model is sensitive to how risk is framed (as an external threat or an opportunity) in the macro-economic environment. We apply threat-rigidity theory to examine the relationship between risk framing and business model adaptation. We also investigate if emotionality has explanatory value for how managers adapt to business models. We test our hypotheses in a field experiment involving 134 Scandinavian managers. Here, we relate managers’ inclinations to adapt to different business models to different risk scenarios. The results reveal that, in general, managers are more risk seeking in gain scenarios than in loss scenarios. This finding is in line with the threat-rigidity theory. Emotionality was found to relate more to risk aversion than to risk seeking in the domain of potential gain. We argue that emotionality has explanatory value for how managers adapt to business models, because emotions are key influences on risk perception.
    Date: 2020–06–08
  15. By: Benjamin Balzer (University of Technology Sydney); Benjamin Young (University of Technology Sydney)
    Abstract: We introduce a model of intuition and contemplation in decision problems under uncertainty. Intuition is a garbling of true information and contemplation is the ability to recover the true informational content of signals. We define natural orders on the quality of intuition and on contemplative ability. In any non-strategic decision problem, the agentÕs utility increases as either the quality of her intuition or her contemplative ability improves. We derive versions of BlackwellÕs Informativeness Theorem for our intuitive agent and apply the model to the canonical Bayesian persuasion problem.
    Date: 2020–02–01
  16. By: Ernesto Mesa-Vázquez (University of Valencia & ERICES.); Ismael Rodriguez-Lara (Department of Economic Theory and Economic History, University of Granada.); Amparo Urbano (University of Valencia & ERICES.)
    Abstract: Using a multiple-price list dictator game, this paper provides experimental evidence that the level of generosity is affected when we vary the probability that the dictator’s decision will be implemented. We also show that framing matters for generosity in that subjects are less generous when their choices under role uncertainty are such that subjects perceive that they are in the role of dictators and know that their choices will be implemented with a certain probability, compared with a setting in which subjects are told that they are in the role of recipients and know that their choices will not be implemented with certain probability.
    Keywords: dictator games, generosity, role uncertainty, framing effects.
    JEL: C91 D3 D6 D81
    Date: 2019–07–29
  17. By: Sabiou M. Inoua (Economic Science Institute, Chapman University); Vernon L. Smith (Economic Science Institute, Chapman University)
    Abstract: "The 1870s marginal revolution in economics culminated a century later in a failure. The core utility maximization principle of this school of thought was shown to have no interesting implication for aggregate market behavior in general (Sonnenschein, 1972, 1973a, 1973b; Debreu, 1974; Mantel, 1974; Kirman, 1989; Shafer & Sonnenschein, 1993; Rizvi, 2006). We argue that neoclassical price theory was flawed from the beginning, owing to the more basic and more serious logical problem inherent to the axiom of price taking behavior, under which market price formation is left unexplained."
    Keywords: History of Economic Thought; Methodology of Economics; Microeconomic Theory; Experimental Economics
    JEL: B C D
    Date: 2020
  18. By: Loïc Berger; Nicolas Berger; Valentina Bosetti; Itzhak Gilboa; Lars Peter Hansen; Christopher Jarvis; Massimo Marinacci; Richard D. Smith
    Abstract: Policymaking during a pandemic can be extremely challenging. As COVID-19 is a new disease and its global impacts are unprecedented, decisions need to be made in a highly uncertain, complex and rapidly changing environment. In such a context, in which human lives and the economy are at stake, we argue that using ideas and constructs from modern decision theory, even informally, will make policymaking more a responsible and transparent process. Keywords model uncertainty, ambiguity, robustness, decision rules
    Date: 2020
  19. By: Hernán Bejarano (Center of Economics Research and Teaching (CIDE); Economic Science Institute (ESI), Chapman University); Joris Gillet (Middlesex University, Business School); Ismael Rodriguez-Lara (Universidad de Granada, Departamento de Teoría e Historia Económica)
    Abstract: We investigate experimentally the effect of a negative endowment shock in a trust game to assess whether different causes of inequality have different effects on trust and trustworthiness. In our trust game there may be inequality in favor of the second mover and this may (or may not) be the result of a negative random shock (i.e., the outcome of a die roll) that decreases the endowment of the firstmover. Our findings suggest that inequality leads to differences in behavior. First-movers send more of their endowment and second-movers return more when there is inequality. However, we do not find support for the hypothesis that the cause of the inequality matters. Behavior after the occurrence of a random shock is not significantly different from the behavior when the inequality exists from the outset. Our results highlight that we have to be cautious when interpreting the effects on trust and trustworthiness of negative random shocks that occur in the field (e.g., natural disasters). Our results suggest that these effects are largely driven by the inequality caused by the shock and not by any of the additional characteristics of the shock like saliency or uncertainty.
    Keywords: Trust Game; Endowment Heterogeneity; Random Shocks; Inequality Aversion; Experimental Economics
    JEL: C91 D02 D03 D69
    Date: 2020
  20. By: Jeffrey W. Herrmann; Kunal Mehta
    Abstract: Attributes provide critical information about the alternatives that a decision-maker is considering. When their magnitudes are uncertain, the decision-maker may be unsure about which alternative is truly the best, so measuring the attributes may help the decision-maker make a better decision. This paper considers settings in which each measurement yields one sample of one attribute for one alternative. When given a fixed number of samples to collect, the decision-maker must determine which samples to obtain, make the measurements, update prior beliefs about the attribute magnitudes, and then select an alternative. This paper presents the sample allocation problem for multiple attribute selection decisions and proposes two sequential, lookahead procedures for the case in which discrete distributions are used to model the uncertain attribute magnitudes. The two procedures are similar but reflect different quality measures (and loss functions), which motivate different decision rules: (1) select the alternative with the greatest expected utility and (2) select the alternative that is most likely to be the truly best alternative. We conducted a simulation study to evaluate the performance of the sequential procedures and hybrid procedures that first allocate some samples using a uniform allocation procedure and then use the sequential, lookahead procedure. The results indicate that the hybrid procedures are effective; allocating many (but not all) of the initial samples with the uniform allocation procedure not only reduces overall computational effort but also selects alternatives that have lower average opportunity cost and are more often truly best.
    Date: 2020–07
  21. By: Antoine Leblois (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Tristan Le Cotty (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Elodie Maître d'Hôtel (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: The low observed uptake of non-subsidised index-based insurance policies in developing countries has been puzzling researchers for about a decade. This paper analyses the role of drought frequency in farmers' demand for index-based insurance in developing countries. While it is typically assumed that an increase in exposure to risk would result in higher demand for index insurance, this paper finds the opposite: an increase in drought frequency may result in lower demand for index insurance under fairly standard conditions. In an expected utility model, we show that the demand for insurance is an inverted U function of drought frequency. We further show that downside basis risk decreases insurance demand under frequent drought conditions. It implies that insurance against similar but more frequent events cannot meet large demand from farmers. To check the empirical relevance of these effects, we conduct an insurance field experiment in Burkina Faso with 205 farmers. We analyse insurance demand for different drought frequencies, different levels of basis risks and different loading factors through incentivised lottery choices. This analysis confirms that for higher drought frequencies, insurance demand is lower. Insurance demand also decreases with basis risk and the loading factor.
    Keywords: index-based insurance,extreme events,frequency,basis risk
    Date: 2020
  22. By: Bunn, Philip (Bank of England); Haldane, Andrew (Bank of England); Pugh, Alice (Bank of England)
    Abstract: Concerns were raised about the distributional impact of the loosening in UK monetary policy following the financial crisis. We assess the impact of this loosening on well-being using household-level data and estimated utility functions. The welfare benefits are found to have been positive, in aggregate and across most of the household distribution, relative to what otherwise would have happened. They are significantly larger than when looking at financial factors alone due to the non-financial benefits of lower unemployment and financial distress. Most people were made better-off in welfare terms from the monetary loosening, rich and poor, although the young have benefited more than the old.
    Keywords: Monetary policy; households; inequality; well-being
    JEL: D12 D31 E52 E58
    Date: 2020–07–17

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