Monetary Policy (A)symmetry with HANK

This paper studies the transmission of aggregate shocks in a Heterogeneous New Keynesian Agent model in which changes in output due to monetary policy shock impacts household incomes. Opportunities for aggregate risk sharing are limited because of borrowing friction. We investigated if shock transmission is asymmetric and output responds more to contractionary shocks than expansionary shocks of equal magnitude. Our model does not generate asymmetric responses to monetary policy shocks even though the model produces realistic income inequality distribution.