BEGIN:VCALENDAR VERSION:2.0 PRODID:-//jEvents 2.0 for Joomla//EN CALSCALE:GREGORIAN METHOD:PUBLISH BEGIN:VTIMEZONE TZID:America/Chicago X-LIC-LOCATION:America/Chicago BEGIN:DAYLIGHT TZOFFSETFROM:-0600 TZOFFSETTO:-0500 TZNAME:CDT DTSTART:19700308T020000 RRULE:FREQ=YEARLY;BYMONTH=3;BYDAY=2SU END:DAYLIGHT BEGIN:STANDARD TZOFFSETFROM:-0500 TZOFFSETTO:-0600 TZNAME:CST DTSTART:19701101T020000 RRULE:FREQ=YEARLY;BYMONTH=11;BYDAY=1SU END:STANDARD END:VTIMEZONE BEGIN:VEVENT UID:da0f60c28a6eca7868c4c151581b1d3727 CATEGORIES:Events SUMMARY:Virtual Seminar | The Last Mile of Monetary Policy: Inattention, Reminders, and the Refinancing Channel DESCRIPTION:
Speaker: Christopher Palmer (MIT)
Paper Title: “The Last Mile of Monetary Policy: Inattention, Remi
nders, and the Refinancing Channel”
Abstract:
Under-refinancing limits the transmission of accommodative monetary policy
to the household sector and costs mortgage holders in many countries a sig
nificant fraction of income annually. We test whether targeted communicatio
n can reduce the attention frictions that inhibit transmission by partnerin
g with a large bank to analyze a field experiment testing messages sent to
12,000 Irish households. While we find only small effects of disclosure des
ign improvements, a reminder letter increases refinancing by 76%, from 8.9%
to 15.7%. To interpret this reminder effect, we extend and estimate a mixt
ure model of inattentive financial decision-making to allow for disclosure
treatment effects on attention. We find that reminders increase the likelih
ood mortgage holders are attentive by over 60%, from 24% to 39%. A conserva
tive back-of-the-envelope cost-effectiveness calculation implies that the a
verage reminder letter generated 42 euros of mortgage borrower consumption
(605 euros per refinancing household). Our results illustrate that targeted
central bank communication such as refinancing reminders could have a larg
er effect on refinancing than a standard policy rate cut. Reminders could f
urther strengthen the refinancing channel and stimulate local consumption e
ven when policy rates are at the zero-lower bound or set in a monetary unio
n.
Paper Link: http://web.mit.edu/cjpalmer/www/BDKMP-LastMile.pdf< /a>
Registration Link: https://us06web.zoom.us/web inar/register/WN_WAoROlYwSDCEv9NpTLgb5g
CONTACT:DavidLow@AREUEAseminars.onmicrosoft.com DTSTAMP:20240328T182132 DTSTART;TZID=America/Chicago;VALUE=DATE:20230412 DTEND;TZID=America/Chicago;VALUE=DATE:20230413 SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR