in the last few years by gianluca violante and other economists, combines heterogeneous agents with nominal rigidities. this increasingly substitutes the assumption of a representative agent present in the dynamic stochastic general equilibrium ( dsge ) workhorse models that have been widely used to study the effects of macroeconomic shocks. the aggregation of heterogeneous households and firms implicitly matters, together with liquidity constraints and various kinds of buffers and rigidities, in the " old - style " macro - econometric models that are still, by necessity i would say, widely used in generating our forecasting scenarios. allowing more explicitly for these characteristics, these new models definitely contribute to improving our understanding of the ways in which monetary policy operates. in traditional dsge models, given the assumption of the representative agent, monetary policy affects the economy mainly through its direct impact on intertemporal substitution, in other words lowering interest rates increases aggregate demand by making consumption today more convenient than consumption tomorrow. in models with heterogeneous agents, however, we find ourselves observing a lesson we learned a few decades ago, that the indirect effects taking place via changes in demand and employment outweigh the direct effects of interest rate changes on the propensity to save. thus, the shape of income distribution plays a significant role in the impact of monetary policy on the economy. in the last few years, research conducted at the bank of italy based on this class of models has shown, for example, that a higher propensity of households to save, 2 / 6 bis - central bankers'speeches possibly due to perceived greater risks of unemployment, may imply stronger effects of monetary policy. this would certainly not appear in models built around the representative agent, because the latter, fully insured over time, would save and consume regardless of their employment status. more in general, and this is my third point, models with heterogeneous agents allow for a deeper understanding of the effects of aggregate uncertainty as well as its interactions with idiosyncratic uncertainty and non - linearities, such as the presence of an effective lower bound for interest rates. another study carried out at the bank of italy in particular shows that the reduction in output that follows a shock to the economy is much higher in the presence of macroeconomic uncertainty due, in large part, to heterogeneities between households. these are not just academic curiosities, even if they require more in - depth study and testing.

this compensation has been uniform across all poorer households. in any case, economic policies can be quite an effective tool for reducing the undesired redistributive effects of inflation. recent data for italy suggest that the impact on the income distribution of the wave of inflation observed since june 2021 was successfully mitigated by the budgetary measures the government has implemented. in addition, the provisions targeting the less well - off have been the most effective. other studies for italy show that, by the end of 2021, the poorest households – those in the first quintile of the expenditure distribution – were hit by a higher inflation rate ( 5. 3 per cent, almost 1 / 6 bis - central bankers'speeches two percentage points higher than that of the top quintile ). nevertheless, the rate of growth of their total labour income far outpaced, in real terms, that of the richest households ( 7 per cent, against a mere 0. 8 ). the distribution of income and wealth across the population is also significant for the decision making process of central banks. it plays an important role in the transmission of monetary policy measures. at the same time, we are aware that monetary policy may contribute to shaping these distributions at business cycle frequencies, with potentially important feedback loops on its effectiveness. there is no shortage of review studies on monetary policy and inequality, so let me focus on only a few points. first, we need a sufficiently good understanding of the channels through which inequality affects the transmission of shocks across the economy. one lesson we have certainly learned in the last two decades ( or perhaps something that has been " rediscovered " after the storm that followed the calm of the great moderation ) is that the heterogeneity in the effects of economic shocks is of substantial importance. there is clear evidence that the collapse of real estate prices in the united states which followed the burst of the global financial crisis, and the ensuing marked recession affected households very differently, depending on the composition of their balance sheets and their sources of income. the distribution of layoffs was also extremely uneven across sectors, occupations and skills. these heterogeneities, in turn, translated into very different effects on expenditure among households, depending on their propensity to consume – a point that has always been a concern of the bank of italy. my second point refers to the development of new models that account for these differences. the new class of heterogeneous agent new - keynesian models, developed