Céline Gimet

This paper examines the transmission of European monetary policy through the joint role of durables, labour market risk and household heterogeneity, contributing to a new generation of OCA analyses. A two-country HANK model is used, in which durables are traded on a secondary market, provide direct utility services and can be pledged as collateral under an LTV constraint that shapes their liquidity. Combining the model with a panel B-SVAR estimated on post-GFC euro area data, the analysis shows that differences in durable-asset holdings, collateral capacity and labour market risk generate heterogeneous responses to common monetary policy shocks. The findings suggest that the distribution of durables plays a key role in shaping monetary transmission and represents an important, yet often overlooked, source of asymmetry within a monetary union.