https://macropaperwarehouse.com/authors/minsu-chang/Minsu ChangHugo -- gohugo.ioen-usThu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/on-the-effects-of-monetary-policy-shocks-on-income-and-consumption-heterogeneity/Thu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/on-the-effects-of-monetary-policy-shocks-on-income-and-consumption-heterogeneity/<p>This paper asks how conventional and informational monetary policy shocks affect the cross-sectional distributions of labor earnings, consumption, and financial income in the United States. The motivation is the growing concern, particularly in the aftermath of the global financial crisis, about distributional consequences of central bank actions. Existing studies either include scalar inequality statistics in standard VARs — losing information about the full distribution — or rely on indirect approaches that hold household portfolio compositions fixed. Chang and Schorfheide instead apply the functional VAR (fVAR) framework developed in Chang, Chen, and Schorfheide (2024, JPE forthcoming) that stacks macroeconomic aggregates alongside the full time-varying cross-sectional density, represented as a log probability density function approximated via a cubic-spline sieve. This allows simultaneous, internally-consistent IRFs for percentiles, Gini coefficients, 90-10 ratios, standard deviations, and other distributional statistics without the risk of quantile crossings.</p>https://macropaperwarehouse.com/papers/bridging-micro-and-macro-production-functions-the-fiscal-multiplier-of-infrastructure-investment/https://macropaperwarehouse.com/papers/bridging-micro-and-macro-production-functions-the-fiscal-multiplier-of-infrastructure-investment/<p><strong>Research Question</strong></p> <p>This paper investigates the fiscal multiplier of infrastructure investment, specifically by incorporating firm-level investment decisions — a dimension absent from prior literature. The central analytical challenge is bridging the micro (firm-level) and macro (state-level) production functions for infrastructure, given that public capital is non-rivalrous: it can be used simultaneously by all firms without being depleted. The paper demonstrates that this non-rivalry generates a systematic discrepancy between firm-level and aggregate-level estimates of the elasticity of substitution between private and public capital, and it shows how this discrepancy shapes the magnitude of the fiscal multiplier.</p>