Economists have long viewed monetary policy as influencing labour demand, with little effect on labour supply. This column discusses four studies that use different methods and data from the US, the UK, the euro area, and Australia, and independently find that monetary tightening induces households to adjust their labour supply. Adjustment margins include hours worked, labour market participation, job search, and household balance sheets. These findings illustrate that labour supply is a quantitatively meaningful channel of monetary transmission that has implications for the resilience of labour markets, the interaction of monetary and fiscal policy, and macroeconomic models of monetary transmission.



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