Publication

This paper incorporates the two most prominent approaches of inequality aversion, ie Fehr and Schmidt (1999) and Bolton and Ockenfels (2000), into a standard New Keynesian macro model and compares them with respect to their influence on the long-run effectiveness of monetary policy. The author finds that the choice for Fehr and Schmidt or Bolton and Ockenfels like preferences is of importance only for the quantitative -but not the qualitative - effectiveness of monetary policy in the long-run.