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This paper focuses on mortgages and compares two transmission channels in a unified framework. The sticky-price channel dominates for temporary policy-rate shocks, while the mortgage (nominal-debt) channel matters most for persistent shocks. Aggregate and redistribution effects differ across channels, yet yield-curve decompositions imply quantitatively similar magnitudes for both dimensions.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/nominal-rigidities-in-debt-and-product-markets-nber-working-paper-22613-abstract/203247/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/nominal-rigidities-in-debt-and-product-markets-nber-working-paper-22613-abstract/203247.png","ImageObject",300,407,{"name":92,"@type":93},"Maeve","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-30","2026-09-04",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",12,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What two channels does the paper compare for monetary transmission?","Question",{"text":113,"@type":114},"It compares the sticky price channel and the mortgage (nominal debt contract) channel within a common framework focused on mortgages.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"When is the sticky price channel dominant, and when is the mortgage channel important?",{"text":118,"@type":114},"The sticky price channel dominates when policy interest rate shocks are temporary, while the mortgage channel becomes important when shocks are persistent.",{"name":120,"@type":111,"acceptedAnswer":121},"How do the paper’s findings relate aggregate effects and redistribution effects?",{"text":122,"@type":114},"The first channel has significant aggregate effects but small redistributive effects, and the second channel shows the opposite; decomposed yield-curve evidence finds the two effects are quantitatively comparable.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},203247,1788557587,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":140,"language":141,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":67,"update_tm":130,"read_time":145,"preview_page_count":4},5909877438554,"https://ap-avatar.wpscdn.com/avatar/5600025385ad2bf12a7?_k=1778553567797529272","NBER WORKING PAPER SERIES  \nNOMINAL RIGIDITIES IN DEBT AND PRODUCT MARKETS  \nCarlos Garriga  \nFinn E. Kydland  \nRoman Šustek  \nWorking Paper 22613  \n[http://www.nber.org/papers/w22613](http://www.nber.org/papers/w22613)  \nNATIONAL BUREAU OF ECONOMIC RESEARCH  \n1050 Massachusetts Avenue  \nCambridge, MA 02138  \nSeptember 2016  \nThe views expressed are those of the authors and not necessarily of the Federal Reserve Bank of St. Louis or the Federal Reserve System. The financial support of the Czech Science Foundation project No. P402/12/G097 (DYME Dynamic Models in Economics) is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.  \nNBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.  \n© 2016 by Carlos Garriga, Finn E. Kydland, and Roman Šustek. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.  \nNominal Rigidities in Debt and Product Markets Carlos Garriga, Finn E. Kydland, and Roman Šustek NBER Working Paper No. 22613  \nSeptember 2016  \nJEL No. E32,E52,G21,R21  \nABSTRACT  \nStandard models used for monetary policy analysis rely on sticky prices. Recently, the literature started to explore also nominal debt contracts. Focusing on mortgages, this paper compares the two channels of transmission within a common framework. The sticky price channel is dominant when shocks to the policy interest rate are temporary, the mortgage channel is important when the shocks are persistent. The first channel has significant aggregate effects but small redistributive effects. The opposite holds for the second channel. Using yield curve data decomposed into temporary and persistent components, the redistributive and aggregate consequences are found tobe quantitatively comparable.  \nCarlos Garriga  \nFederal Reserve Bank of St. Louis P.O. Box 442  \nSt. Louis, MO 63166  \n[carlos.garriga@stls.frb.org](carlos.garriga@stls.frb.org)  \nFinn E. Kydland  \nDepartment of Economics University of California, Santa Barbara Santa Barbara, CA 93106-9210 and NBER  \n[kydland@econ.ucsb.edu](kydland@econ.ucsb.edu)  \nRoman Šustek  \nSchool of Economics and Finance Queen Mary University of London Mile End Road  \nLondon E1 4NS  \nUnited Kingdom [r.sustek@qmul.ac.uk](r.sustek@qmul.ac.uk)  \n1 Introduction  \nModels of the real effects of monetary policy typically rely on nominal rigidities in product markets (sticky prices) . The New-Keynesian literature—represented by, e.g. , Woodford (2003) and Galı´ (2015)—has devoted significant effort into understanding the monetary transmission mechanism operating through this type of frictions. The focus has been mainly on aggregate effects; i.e., on how changes in the nominal interest rate—a monetary policy instrument—affect aggregate output, consumption, and other key macro variables. Following Doepke and Schneider (2006a), another strand of the literature on the real effects of monetary policy has emerged. This literature, for most part, maintains the assumption of flexible prices but pays attention to nominal rigidities in debt markets (Meh, Rios-Rull and Terajima , 2010; Sheedy , 2014; Doepke, Schneider and Selezneva , 2015; Garriga, Kydland and ˇSustek , 2016; Sterk and Tenreyro, 2016, among others) .1 In particular, this line of research recognizes that most debt contracts specify cash flows between borrowers and lenders in nominal terms. As a result, by ultimately affecting inflation, monetary policy affects the real value of these payments and thus, under incomplete asset markets, disposable income of borrowersand lenders. By the very nature of the problem, this research can address redistributive consequences of monetary policy, in additio","cbCaialEebZ8Nvz2","https://ap.wps.com/l/cbCaialEebZ8Nvz2","pdf",414880,54,"English","# Abstract\n## Introduction","[{\"question\":\"What two channels does the paper compare for monetary transmission?\",\"answer\":\"It compares the sticky price channel and the mortgage (nominal debt contract) channel within a common framework focused on mortgages.\"},{\"question\":\"When is the sticky price channel dominant, and when is the mortgage channel important?\",\"answer\":\"The sticky price channel dominates when policy interest rate shocks are temporary, while the mortgage channel becomes important when shocks are persistent.\"},{\"question\":\"How do the paper’s findings relate aggregate effects and redistribution effects?\",\"answer\":\"The first channel has significant aggregate effects but small redistributive effects, and the second channel shows the opposite; decomposed yield-curve evidence finds the two effects are quantitatively comparable.\"}]","Nominal Rigidities in Debt and Product Markets - NBER Working Paper 22613 - Abstract | PDF",136]