[3] In his earlier work, Moll showed that an important driving factor in determining the aggregate effects of poorly functioning credit markets is the persistence of idiosyncratic productivity shocks hitting producers.

They argue that monetary policy operates mostly via general equilibrium effects on the labor market, instead of the standard intertemporal substitution channel.

This is due to a sizable share of households exhibiting high MPCs, whose spending behavior reacts strongly to changes in disposable income.

As Ricardian equivalence fails in HANK models, the reaction of the fiscal authority to a monetary shock is key to determine the overall macroeconomic response.

Together with mathematicians Yves Achdou, Jiequn Han, Jean-Michel Lasry, and Pierre-Louis Lions, he recasts general equilibrium models in continuous time using mean-field game theory.