The COVID-19 pandemic has rapidly spawned a literature analysing its impact on macroeconomic aggregates. But there’s also been work that seeks to look at heterogeneity of impacts across industries, households and individuals. This post summarises this literature which seeks to better understand the heterogeneous effects of the pandemic and associated policy responses on income, hours worked and employment status.
Saleem Bahaj, Angus Foulis, Gabor Pinter and Paolo Surico
Changes in interest rates affect different parts of the economy differently. In this post, building on a recent working paper, we consider how different types of firms respond to interest rate changes. We focus on firm level employment and ask which firms do the most hiring and firing when monetary policy adjusts. For instance, how important is the age of the firm, its balance sheet position or its size in determining the firm level response to interest rates? Furthermore, do these patterns of responses tell us something about how monetary policy affects the economy?