Conference Paper
Monetary Policy and Informality: Understanding Policy Transmission in Tunisia from a Heterogeneous Agents Model
No.
ERF_31_MC208
Publisher
ERF
Date
March, 2025
Topic
E. Macroeconomics and Monetary Economics
We evaluate the transmission of monetary policy in an economy characterized by heterogeneous households and a sizable informal sector. We develop a Duel-sector Heterogeneous Agents new Keynesian Model to recreate the Informal Engel Curve observed in the survey data. Results suggest that, first, heterogeneity amplifies the buffering effect of informality. Second, estimating the model using the Bayesian method reveals that unemployed and informal workers are more vulnerable to the redistributive effect of monetary policy shocks than their formal counterparts, especially at lower wealth levels.
Authors
Mohamed Safouane Ben Aissa
Full Professor of Economics, Tunis El Manar...
Authors
Firas Nfikha
PhD Candidate in Economics, Faculty of Economic...