"A Comment on HANK Models," April 2026.

Paper: pdf file Abstract
This paper contrasts HANK models with structural macroeconometric models. Because of the high level of aggregation of HANK models, many important features of the macro economy are ignored, features that are relevant for estimating monetary and fiscal policy effects and for general business cycle analysis and that are part of macroeconometric models. A comparison of the properties of two HANK models to those of a particular macroeconometric model reveals large differences. The HANK models have much larger initial policy effects than does the macroeconometric model.