Erik Öberg

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On money and consumption

This thesis contains four self-contained chapters concerning macroeconomic aspects of money and consumption. Chapter 1 considers a model where taxes must be paid in money issued by the government and provide conditions for a unique monetary equilibrium. Chapter 2 investigates how income inequality affects the transmission of monetary policy to output. In a heterogeneous-agent model, it is shown that with only rigid goods prices, monetary policy does not affect output, while with also rigid wages, it does. Chapter 3 investigates how adjustment frictions affect the expenditure response of durable goods to fluctuations in unemployment risk. New empirical micro-level estimates are provided and it is shown that a calibrated buffer-stock savings model with adjustment frictions reproduces these estimates. Compared to its frictionless counterpart, the model predicts that the aggregate response of the demand for durable goods to an unemployment risk shock is raised by 200 percent. Chapter 4 investigates how consumption expenditures respond to unemployment risk using aggregate time series data from the US and ten EU countries. For the US, the evidence suggests that the response is strong, while for the EU countries, the evidence is mixed. Erik Öberg holds a B.Sc. in Business and Economics from the Stockholm School of Economics and a B.Sc. in Art History from Stockholm University. Doctoral Thesis in Economics at Stockholm University, Sweden 2017