horse with a speed of light, a cloud of dust, and a hotty-hio silver! The Lone Ranger! General Mills, makers of Cheerios, the ready-to-eat Oats cereal that gives you go-power, and Wheaties, the breakfast of champions, present by special recording, The Lone Ranger! Gee man, Jimmy is eight years old. He is strong and he is bold. He can capture outlaws because he knows he's got- Cheerios, all right. The nourishing Oats cereal that's shaped like little letter O's. The ready-to-eat cereal with a wonderful toasted oat flavor. What's more, every delicious spoonful of Cheerios and milk is real muscle-building food. That's right. Each spoonful contains vitamins, minerals, and proteins your body needs. And these good things in a Cheerios breakfast do good things for your body. Help you have healthy nerves, good red blood, strong bones, and muscles. Yes, Cheerios is made to give you real go-power. So try Cheerios, the famous oat cereal that needs no cooking. And soon you'll hear people say... He's feeling his Cheerios. With his faithful Indian companion, Toto, the daring and resourceful Masked Rider of the Plains let the fight for law and order in the early western United States. Nowhere in the pages of history can one find a greater champion of justice. Return with us now to those thrilling days of yesteryear. From out of the past come the thundering hoofbeats of the great horse Silver. The Lone Ranger rides again. Come on, Lone Silver, what's going on? Are you still there? Battle was in progress in the town of Shady Ben. Bob Hawkins and the Lone Ranger's nephew Dan Reed fought side-by-side against half a dozen other boys. Dan had been taught by the Lone Ranger how to dodge and parry blows and how to hit effectively. He and Bob Hawkins blackened several eyes and bloodied the noses of a couple of boys and finally the attackers withdrew. It's much right to live here as you have and you're not going to drive us out. You're driving Kelly, you're driving Kelly. Why you let him go? We gave him something to think about. Hey, why'd you pitch into the fight and help me out? You needed help. The odds were against you. See, I'm Bob Hawkins. I guess you heard what some of the fellas said about my dad. I'm Dan Reed. I heard about you, Bob. In fact, I came here to look you up. Your dad was a friend of mine... was a friend of a friend of mine. Oh, well, they all say dad was no good, but that's not true. He was a swell dad. He wanted money so I could go to school. He got mixed up with some smugglers. But he wasn't bad. And he didn't kill anyone in spite of what the law said. The rest of the gang framed him. You gotta believe that. I believe it, Bob. You saw how the boys were picking at me, Dan. I don't mind that so much. It's the way they're doing up street, my mother. None of them speak to her anymore. Well, I won't sit still for that. I don't want you to think I'm asleep. I'm going to do something about it. I'd like to know your mind, Bob. Would you come out to our house? I'd like to. Would you? Would you really? Oh, gee, that'd be great. Come on, Dan, we live right over there. It's not much of a place. We had to move after Paul was buried. We used to have a lot bigger. Below Ranger and Tuttle were waiting in camp when Dan returned and told about the fight and the visit to Bob Hawkins' house. According to Bob, most of the crooks are still at large. His dad's the only one who was caught. Yes, that's right. The smuggler's organization is still practically intact. Are they still smuggling guns into Mexico? Oh, I think they'll lie low for a time and start operations again when they consider it safe. Those crooks. They should have been hung instead of Bob's father. They're not found, Dan. They'll expand their power till they become a real danger to the international relations with Mexico. Furthermore, a government agent has been murdered. Every man who had a hand in that must pay. I wish something could be done so Bob wouldn't have to leave town. Oh, is he leaving? Uh-huh.  Bob's leaving in the morning. He'll get a job someplace where he's not known and then send for his mother. In the morning, huh? Yes, sir. Why? I want to talk to that boy. I'll see him tonight. That night, Bob Hawkins lay awake in his bed long after his mother had sobbed herself to sleep. The moonlight slattings with the open window and a square patch on a rolled-up blanket that held Bob's few possessions. It rested in a corner ready to go with the boy at daybreak. Then the shadow of a man's head and shoulders appeared and a voice came from a window. Bob? Huh? What? Take it easy, Bob. There's no need to wake in your mother. Who are you? Bob turned toward the window as he leaped from bed. It was light enough to reveal the fact that the midnight visitor was masked. What does that mask mean? Are you one of the gang? Don't let the mask mislead you. The more with the window, Bob, I want to talk to you. If you're one of the crooks of flame? No, I'm not.  No one can help me. I don't want any of them. Bob, also, I want you to help me. I'm not helping anyone. That's a mistake my father made. I knew your father. He was a good man until he met Tom Martin. That law said he was a smuggler and a killer. Bob, I want you to help me make Tom Martin and his pals pay for what they've done. Why doesn't the law get them like they got dead? The law must have proof against those men. You might be able to help me get that proof. How? You're planning to leave town. I figured on leaving at daybreak. My blanket rules already. I want you to leave but not at daybreak. Before you go, I want you to do some talking in town. Talking? Yes. Stay in town for several days while you talk about leaving to get a lot of money. I'll tell you what to say. The Lone Ranger spoken a low voice for over half an hour while Bob listened with mounting interest and enthusiasm. The boy did not leave town at daybreak. He stayed around for several days during which he dropped remarks in certain places and did some carefully planned bragging. Soon after Bob Hawkins left Shady Bend a man named Bart Jenkins mounted a horse and rode hard to a cabin in a woods not far away. Tom Martin and several other men were there. They came out to meet Jenkins. Ho, ho, ho! Mine's hard, Bart. What's up, something wrong? Tom, I got news. Well, let's have it. Jim Hawkins' wife and son have been having hard coins since the trial. He knew that. That's not my worry. I gave Jim Hawkins what I promised. He got his share. He didn't do any of the dangerous work like the rest of us. We didn't need him at all. It was Tom's idea to have him act his front man and handle the cash. And it was a good idea. He's the one who was seen, so he's the one who got his neck stretched. As for handling the cash, none of you trust me. And I felt the same way about you, Critter. You only thought you could trust Jim Hawkins. What's that, Bart? Remember you thought he should have got more cash than he collected? That's what we thought. Well, it looks like he did. He held out on his silver. He hid away a lot of the cash, and now his son is going to get it. What? I didn't know I was working with you, Tom. He told me a few things, bragging sort of. He's got a mask man and an engine to help him, and they were running to happen. He talks to you so free. He's glad to have someone who listened to him. Not many people talk to him. What about the mask man and Indian who are helping them? After what he told me, I kept watch out for him. He got enough cash from some of us to buy an old horse. This morning he left town, so I followed for a ways. Outside of town, he met the Indian and the mask man. The three started along the trail toward Pleasantville. Well, why didn't you follow along? Those two men wore guns tired low. I didn't want to take chances. So I come here fast. We can cut them off on the trail if we go over the mountain. Maybe we should let the boy have that cash. After all, Hawkins took his medicine without telling them the rest of us. Only because I told him his wife and kid would get hurt if he did. If he held out on the cash, I want it. Me too. Get the horses, boys. The four of us will be able to handle the boy and his pals. We'll bring them back here and ask them questions. The low ranger and talker would left Dan Reed in charge of the camp while they rode slowly toward the town of Pleasantville with Bob Hawkins. Presently, they saw four horsemen approaching from a hill on the south. There's Tom Martin. He's been suspected of many crimes, but no one ever had proof against him. There's Bob Jenkins. He lives in town. One of the men you talked to? Yeah. Bob, I think you're looking at the men who ruined your father. I had a gun. I'd make him pay. No, the law must get them. Now remember, Bob, you too, Tonneau. You're doing exactly as I said. May I remember, Kimosabe? Hey, hey, hey! You're coming! Hold on! Hold on! Hold on! Hold on!  It's all right, Bob. Hold on! Hold on! Hey, Bob, why are you waving a gun at me?  These are my friends. And these are my friends. I won't be gun-played if you do as I say. What do you want? I want to talk to you and the kid, but not here. We're taking you where we can talk without being disturbed by someone coming along the trail.  Beaver, you and Bart take their gun right. That man's mask. We'll see who he is. Oh, one minute. Are you planning to make prisoners of us? What's it look like? Don't try it. We'll go with you to talk, but if you try to disarm us, we'll argue the point. Two of you armed against four of us?  Maybe he's right, Tom. All right for the time being. You can keep your masking guns. As for later on, we'll see. We'll continue our lone ranger adventure in just a moment. That goes for the star wherever you are. Take Barbara Ann Scott, figure skating champion from the Northland. Watch her on this one. Barbara Ann's good. Now, there is a champ who's a real Wheaties fan. Sure helps to keep a gal up on her toes. A guy too. Take Bob Lemon who pitches a lot of ball for the Cleveland Indians. Lemon knows what champions know. Wheaties for breakfast away you go. Gosh, no wonder the champs of tomorrow are eating Wheaties today. There's a whole kernel of wheat in every Wheaties flake. Now to continue. Tom Martin looked at the masked man and saw what he thought was a trace of a wink. He accepted the lone rangers offer to go to the shack without resistance. If no effort were made to disarm or unmask him. Bart Jenkins rode ahead to show the way. The lone ranger followed accompanied by Bob Hawkins and Toto. In the rear, Tom Martin and the two remaining smugglers held their guns in readiness. One man was left outside the shack as guard, so there would be no interruption. The others went inside. Martin eyed the masked man for a moment. Now we can talk. I think I know what you want to discuss, Martin. Before we get down to business, we'd better send the boy outside. Who, me? Now hold on. Why, Bob? Why can't he hear what you're going to say? Because, unless you're outside, I won't talk. Take him outside and tell Toto to watch him. Right, boss. How about the Indian? He stays. He's good going, Bob. Well, this is a dirty trick. No, no, no, I want to hear what you say. Hey, Joe. I just want you to keep an eye on the boy so you don't get away. I'll watch him. Now then, how about getting down to business? I'm ready if the masked man is. How about it? I'll let you keep your mask and guns, and I've sent the boy out. Now, is there anything else you'd like before you're ready to talk? I'm ready now. It is true, isn't it, Bart, that Bob Hawkins told you his father had received some cash from the last shipment of guns across the boy? It strikes me as odd that the kid didn't speak of it or do something about it before this. He knew very little about it until I talked to him. Even now, he can't locate the cash without my help. You can tell us where the cash is hidden. Oh, no, no, Tom. I won't do that. I'll get the boy to talk. He can't tell, but he doesn't know. Martin hears the situation. I know that a lot of money paid for smuggled rifles by Mexican renegades is hidden, but I don't know where. To get that information, I must call on a certain man, and he won't talk unless I take Bob Hawkins with me. You'll have to see the boy to be sure Bob's in on the deal. After I have that information, I'll need help. More help than the Indian can give you? Yes, I'll need your help. That's why I was willing to come here for a discussion. You want us to go partners with him? Oh, you might say so. And split the cash seven ways? No. The two outside don't have to be cut in. You mean Joe and young Bob?  You know what I mean? Yeah. You mean we eliminate the people we don't need when we're through with them. It's a good idea. I'll take that deal. Now, where we find the Ambrie, you can tell us where the cash is hidden. You'll know when we get there. We're heading toward Pleasantville. We go beyond Pleasantville. We can reach our destination by sunset. And we'll start right now. The Lone Ranger, Bob, and Tuttle went with the four smugglers to a small community called North Plats. It was nearly sunset when they grew rain in front of the general store, the only building at the crossroads. So this is the place. Yes. I'll go into the store with Bob. Come along, Bob. All right. You stay here, Redskins. You stay here. The store was lighted by only a small window in the open door. The smugglers outside couldn't see too clearly. They didn't know that the man behind the counter was not the regular storekeeper. That his beard was false. Or that he was actually a special agent for the government working by pre-arrangement with the Lone Ranger. Those men outside of the crooks have got evidence against them. We must find where they have hidden the money. The records and the guns they still hope to sell. Just tell me the next move and I'll play along. Those men think the law is after them. They'll hurry across the border. They'll be sure to take their cash with them. And most likely the rifles and their records. When they go for those things, they'll reveal their hunting places. Yes, that's it. How are you going to make them believe the law is after them?  They'll know that in a murder case, because we're all together. I'll bomb you, Stan. I wish we could hear what's going on inside. Let's go closer. Better we stay here. Do what mask men say. Indians right. Tom, I don't like what I see in there. The boy's trying to talk and the mask man's trying to stop him. Hey, he's drawing a gun. He's pointing it at the boy. I don't want gunsling. Not here. Why are you... You started gunplay. Shots will bring men from the houses over yonder. Here comes the mask man. You pay, you pay. Get going before he finds another gun.  Get out of here. The boy started talking.   Please, the questions! Get out of here!  The six men rode hard away from town and maintained the pass apiece for several miles. Then Tom Martin signaled a halt. Oh, oh, oh! Silly big fella. Oh! We can stop here for the horses to get their wing. You'd have tell me why you started gunplay. You'd have done the same thing, Martin. That man in the store wasn't the storekeeper. Who was he? Special agent for the government. Oh, it's that. I didn't know someone would go there. He took the storekeeper's place. And Bob found it out. He told the man who you were. Why that little... What else did he say? He told about your hideout, your shack in the woods. Why didn't you shoot sooner? I did the best I could. You should have killed the government, man. Oh, no. That's too risky. The law always gets the killer of a government man. I disarmed him with a bullet. That gave us time to get clear. All right. Get going, boys. Head for the shack.   It suits me. Come on, boys.  Come on.  The lone ranger and tattle roared at an angle to the root of the four smugglers and were soon out of sight in a stand of timber. Tom Martin and his men continued as fast as their horses could travel to the shack where they had lived for the past week. Oh! Oh! We gotta work fast. We aim to get across the border with the things we got there. But you stand watch. Let us know if anyone comes this way. Right. The rest of us will get the stuff together. You think we can take the time? We can't cross the border broke, can we? We work too hard to get our pilot cashed together, and we'll need the names of those men we deal with in Mexico. I'll get the records. Get to work, boys, and fast. Get the cash and records. You boys take those rifles. All of them? Certainly. As we can hear is evidence. Time and bundles. Each of us carry a bundle. If they get too heavy, we'll hide them someplace between here and the border. Hey, someone's coming through the woods. Well, we gotta have a little more time. If it's long, we'll have to fight it out. Can't we? We can leave the rifles. I'm giving the orders. Look, it's that white horse. He's been here. He's got plenty of nerve. Now, what do you want now? We'll soon find out. Where'd you come here? Hold it over. Hold it. It's gonna be close. I had several reasons, Martin. There's one thing I wanted to tell you and your men. Well, what is it? Speak fast. We haven't time to listen to talk.  Oh, there's lots of time. You're not going across the border. Who ain't? What do you mean by that? There's a lot you men don't know. I came to tell you that in the first place, Hawkins didn't hold out any cash. What? But that kid told me this. He told you just what I told him to tell you, Bart. He told a number of people the same thing. To see who would rise to the bait. I suspected you might be the one, but I wasn't sure. Why, you... You crooks ruin the life of Bob's father. You nearly ruin the life of the boy. But I think things will be all right now. I don't like the way you're talking. Just begin to sound like you tricked us. You're getting worn, Tom.   Tom, I thought you'd say that. I hoped you wouldn't say it before some men got close. Well, I'm saying it now. In a minute! No! Hey, take the boy! The first shot came from behind a nearby tree and blew the gun from Martin's hand. Others followed quickly, and several men moved into view behind their blazing guns. I'm quitting. I give up, don't you?  Tom Martin was the last to quit.  As he brought it to bear, the Lone Ranger leaped forward. No, you don't! No! Let go of my wrist! Gunner, I'll break your arm! All right, all right! My hands are up. Don't shoot him! Don't shoot him! Now, all these handcuffs. Then you're dead in court. Do these evidence you dug up? Well, it looks like they'll be hanging. Mr. Dale, you and your men won't need Todd with me any longer. No, we can take care of these books now. And from the looks of things, I'd say there's evidence enough to hang them all. Oh, uh, just one thing before I go. Uh, about Bob Hawkins. I'll see that he's made the hero of this capture. And for the more, there's substantial rewards. Good. Then Bob and his mother will be taken care of. Well, how do you, Dale? You ready, Todd-O? Wait, you've earned a share of those rewards? Just tell your boss in Washington that our mission was accomplished. Easy, sir. Let me go. Come on, sir! Let him off the couch. Hey, Mr. Dale, let the last man he's leaving. That's right, Bob. He doesn't stay around after his mission's accomplished. He's one of the cubbies. You see, he's the Lone Ranger.


Yes, so let me start by thanking the organizers for this prestigious and super interesting conference so far. I'm also supposed to say that because this presentation is based on joint work with a number of co-authors in a summer home like Ipe Alves, is at the Bank of Canada and beer category, and I think you probably all know well, BCP, the music for this year are mine and you don't necessarily have to go to BCP or the Bank of Canada. All right, so I want to try to summarize my message in the first slide of my presentation. My starting point here is that the distribution of income and wealth is central to much of economics. Think about labor economics. In labor, there is much research. There has been a lot of research that has spent 15 years and 20 years on the evolution of skill in Tasmania and therefore wage inequality in response to technical change. In public economics, the distribution of income is key for the understanding of the optimal design of taxes and transfers. In macro, in most of macro, there is quite a bit of research on the determinants of wealth inequality both in the perception of overtime and even in finance, the tradition has been monopolized by three models, habits, various disasters and longer risk, which are represented by the laws. There's an active area of research on intelligence preferences and insurance employees. Instead, I think recently the distribution of income and wealth played almost essentially the role of monetary economics. So the science of monetary policy has been dominated largely by the representation paradigm and the practice of monetary policy has been greatly influenced by this perspective from which we obviously bear a lot. But my point today, my message today is that the distribution of income and wealth matters for our monetary policy transmits to the real economy. In order to make this point, I think it's helpful to start from kind of recapping what the transmission mechanism of monetary policy is in the representative agent version of the New Pansial Model. For this purpose, I'm going to sketch out a style, a stylus model, one that can be solved in most form. The model is in continuous time, the representative agent has CRR preferences with inter-temporal institutions with one organa, and this counts the future trade role. Remember that in this model, the representative asset is also a primary income consumer, and therefore, raw is essentially also the primary income consumer, auto-transitory income, or the representative asset. Technology is very simple, output is equal to the total amount that they will supply, and very small. We're also assuming the prices are perfectly rigid, here's where essentially you can get the cross-form solution, but this is not really a particularly restrictive property or assumption from the point of view of the insight that this stylus model gives. The monetary authority sets the time path of the nominal interest rate, which is also the real rate here, which is the prices are rigid. You know, R0 is a monetary shock at impact, and the shock decays at rate eta. A large eta means that the shock is very transitory, and one over eta is the average duration of the shock. The equilibrium is very simple here, it's market period, the goods market, consumption and total output, and we're focusing on one equilibrium where consumption goes back to state to state. So it's straightforward to show that the impact effect at equal zero of a monetary policy shock is given by this formula here, minus one over gamma eta. So essentially it's a product of one over gamma, which is the average duration of the shock. This is essentially for given duration of the shock, you know, the higher its interval substitution, the higher is the effect of the impact effect of the shock on higher consumption. Okay, but let's sort of dig a little bit into this formula. Let's try to understand the transmission of the monetary shock to consumption in this model. In the work that we've come up with in the model, which we sort of suggest is the composition, right, where an enormous response function of say an aggregate one, say consumption to a monetary shock can be decomposed into two channels essentially. The first channel is what we call the direct effect of the monetary shock effect or the interest rate on individual and aggregate consumption. This is a partial equilibrium channel keeping income constant. The second channel is the indirect effect through the change to the general equilibrium change in disposable income that is induced by the monetary position. Okay, and here essentially what happens in the column is that after the shock equilibrium price is going to change. So the way to do change asset prices are going to change or, you know, in a labor market, the creatures with wages to move or in actual employment would change and then would increase burdens. Also fiscal variables will change because the intertemporal budget of the government as we just saw the taxes and grants will change. What is a transmission mechanism is essentially the composition of the error into direct and indirect. So, once you do this, the composition in our special case, you obtain essentially that the direct response to the interest rate is given by the simple formula Eta or Eropas Eta and indirect effect is given by Roe over Eropas Eta. Remember that Roe is the marginal risk to consume essentially in this model. Now think about plausible, very straightforward, quarterly parameterization of this model where Roe, the discount rate is about 2% per year. So 0.5% quarterly and Eta, which is this, this decay rate is 0.5, which corresponds to kind of a half life of two quarters, which is roughly the half life of monetary positions. Then, if you plug in these numbers into the composition is straightforward to see that the direct component contributes for, you know, almost entirely the transmission mechanism monetary points. So Eta over Eropas Eta is close to 0.99 in this simple exercise. And why? Well, basically because Eta is two orders of life are greater than Roe and because Roe, which is the MPC in this model, is extremely small. So basically, in this model, there is no really, you know, sort of came, you know, the size of the of the Keynesian generically loaded lighter is really tiny because MPC is super tiny. So in rank, in the representation model, the transmission mechanism, it's all about inter-temporal. Now, this was a simple example, but the same result holds true in leading scale monetary G models, like the benchmark, as mentioned about this model. Now, the paradoxical thing is that, you know, even though the model is called a Keynesian model, it's not very Keynesian at all. Because the size of the Keynesian multiplier is really tiny. And in fact, as John Cochran nicely put it, this model should really be called the sticky price inter-temporal. It's very neoclassical at heart, in a way. So, okay, this is just an observation, right? This is just a transmission mechanism. So what is wrong with this aggregate inter-temporal substitution model? So this logic is sort of in contrast with much empirical evidence. Now, I obviously don't have the time, this is the place to summarize in detail the empirical evidence, but also there is a solid amount of empirical work that suggests that even in the very developed high-income economies, not everyone is a permanent income consumer. It is a large share of what is called in the literature hand-to-hand households with high marginal consumption of transitory income and low sensitivity of consumption to the interest rate, which essentially, from the point of view of the model, they are not on their own. And there is a material distribution on marginal consumption across the population. Some households have IMPC, others are permanent income consumers are very low, and there is a housing system. So, these observations, this sort of body of empirical evidence has two implications from the point of view of economic insights. The first is that the wet distribution and the portfolio composition of wealth determines the distribution of MPCs and the aggregate marginal consumption. And the aggregate marginal consumption is key in determining the size and the strength of this indirect general critical effect of monetary policy. The second insight is that once you start thinking about a world where the third genius marginal consumption, then even pure income distribution, a shift of income across the distribution can have real effects. So, in particular, by redistributing income towards high MPC households, the effects of monetary policy can be identified. So, what we need essentially is a framework to start developing these two insights and start measuring these two insights. And, you know, in the last few years, I think a lot of progress has been made in the literature and a new kind of macro framework is emerging. This macro framework, in a way, it's a very macro progression of quantitative macro, which for a long time progressed as kind of representative agent, kind of monitoring USG models on one side and on the other side, heterogeneous agents, incomplete markets model, they were mostly focused on kind of system policy in the long run. So, these new cluster models merges these two approaches, these sort of AII garrick-rosels, AII garrick-rosels, and the main advantages, as I said, is that you can think through the income distribution, the wet distribution and the effects of these assets on the MPC and the application of monetary policies and so on, which is what I'm going to focus on in the next 20 minutes or so. But I think that there is also something else which is attractive about this approach. Empirically, it's a unified approach to the analysis of micro and macro data. And I've seen recently a lot of exciting work that tries to extend the standard tools of base and estimation that have been used in the estimation of ESG models, which combine together longitudinal panel micro data with time series to estimate these cluster models. Conceptually, it's a unified framework to study both kind of short-run fluctuations and long-run dynamics of distribution. So in that sense, it still has a flavor, a little bit of this kind of RBC, New Keynesian models, which are, you know, which are essentially versions of the stochastic growth model, right? So, versions to analyze the short run of a model that was designed for life. And also, they provide a unified framework to study together stabilization and redistributive policies. And in this world, any stabilization policy has a redistribution implication and any redistribution policy can be stabilizing or destabilizing. So there's a really, these two policies are necessary in their one. And technically, it's now a lot easier and faster to solve these models so these models are a lot more accessible. So many offer, in one slide, one version of these models, which happens to be the one that I work with, I don't have them all, but there are many versions of this framework that are also extremely useful to analyze these models. So the model that I'm going to work on, essentially, is one with a continuum of households who face an issuable idiosyncratic income shock, for a company shocks. They choose consumption, saving, and supply, and they can save into assets, which we're going to call the liquid asset and liquid asset. The liquid asset in the model is basically government bonds, and the liquid asset in the government is basically physical capital. Or if you like, equities to a mutual fund that holds physical capital. In practice, the way we map these assets into the, say, the certain consumer finance data portfolio position is for liquid assets, we use cash, data accounts and government bonds. For a liquid asset, we use the, use basically housing and 401ks. Okay. And, you know, one key feature of this model, and we'll explain why it's important, it makes a transaction cost to move funds into the liquid account or out of the liquid account. And you have to think like, okay, it's costly to withdraw from 401k. It's costly to extract it from the house. It's costly to buy a house or to, or to, you know, sell and upsize your house, and so on. It's always a very stylish way of capturing all these complicated asset structure in the house of the structure in the economy. In equilibrium, the model determines both the returns in particular because the liquid asset is the liquid asset transaction cost. The equilibrium on the liquid asset dominates the real right on the liquid asset. So the liquid asset from a certain perspective is a very, very appealing asset to say, but also the liquid asset is appealing because it provides a way to move consumption. And the very short-term liquid asset doesn't provide this asset because it's in equilibrium. The remaining model ingredients are kind of standard. We have a nominal rate being set by a federal rule, and then a Phillips Curve determines the relationship between inflation and debt. Okay. So what this model gives you is basically the ability to generate a very realistic wealth distribution, both at the top with fairly high concentration of wealth at the top and at the bottom. In particular, at the bottom, the model can generate a large share of these kind of hand-to-mouth houses. Now, let me do a little integration and move to the data and tell you about what the data say on the prevines and the distribution of hand-to-mouth houses. This is a plot that measures hand-to-mouth households in the survey consumer finance from 1989 to 2019. It's a trend in the survey. Where we define hand-to-mouth households are being dosed with low liquid wealth. I think basically less than two months of operating costs. The first thing that the judge of you is that there's about 30%, between 25 and 30% of households who are hand-to-mouth. This share is quite significant. It peaks in conversations and it falls in expansions. And perhaps it comes to good news that if you look at 2018, just before the epidemic, we had historically one of the lowest shares of these houses. So that's kind of the news in a way. The other thing that is important is to distinguish within this category two groups. So these are all households with low liquidity. But within this group, there are the poor households that have low liquidity, also low net worth in general. And the so-called wealthy hand-to-mouth. These are low-liquid wealth individuals who actually have some sizeable investment in liquid assets. They could be because they own a house, with a mortgage bank, because they have some sizeable 401k. But what matters for consumption is liquid wealth is very low. The typical, if you look at the data and try to dig into who these guys are, the typical group is basically young homeowners. Or homeowners who just bought a house, they have a large mortgage, and the mortgage payments are absorbing a lot of the cash flow for these households. Basically, they have a large commitment expansion. And the two asset model is precisely able to generate these group of households, which are, as you can see, the majority of hand-to-mouth households. They're like two thirds of them. Well, two hand-to-mouths are only one third. So the model gives you the ability to generate essentially a realistic wealth distribution both at the top and at the bottom. And as a result, it gives you a fairly rich distribution margin of risk to consume. This is a plot of the MPC out of a windfall of $500 over the first quarter as a function of liquid and liquid wealth. What you can see here essentially is these two regions. There's a ridge on the MPC, two regions where the MPC is very high, which is at zero and at the credit limit. This is sort of the credit limit here. And obviously, the MPC is very high, both at zero and at the credit limit. The credit limit can become relatively quickly. But what is interesting is that the MPC remains large, even for those households that say they are around here, that there is very low amounts of liquid wealth, but there is some liquid wealth. These are the wealth hand-to-mouths. I mean, obviously, there's not a very large share of massive population of this point here, but there is some as we saw. It's about 20% of households who are in this range here. Overall, you combine things together and you get a quarterly aggregate margin of risk to consume around 15%. Which perhaps is not as large as what some empirical words suggest. You know, work by Jonathan Parker and co-authors of the tax rebate, which is a kind of really clean quasi-natural experiment, suggested this quarterly position may be 25%. But still 15% is 30 times bigger than the MPC in terms of budget model that at the quarter the frequency is about 0.5%. So you can start seeing that because of this key difference between these two models, the general equivalent effects are going to be much larger in this class of model, relatively preferable. In fact, if you cannot take this model, you take this model and you run a monetary policy, an expansionary monetary policy shop. And you see what happens in this model and you decompose the impulse response into direct indirect effect. Here's what you get. In the left panel, you have the aggregate consumption response in rank and rank. I think this is a 15 basis point, changing the nominal rate. In the middle panel, you have the composition in the representative agent model and in the right panel, the composition in the derivative agent. So the first observation I want to make is that the impulse response function for aggregate consumption are very similar across models. They're almost on top of each other. So this is, it's sort of a desire for this particular experiment. We pick up a representation from which you get this kind of almost equivalence result between the two models in terms of aggregate. And I'll come back later on this point. This, what is important here is the middle panel and the right panel that offered the composition of the impulse response between direct and indirect effect, which is sort of this partial political and general political income channel in the two models. And you see the transmission mechanism is very different. In rank, it's mostly the direct channel that dominates. And in rank, at least in the very short term, in the long run, the indirect, but it's still very small. And basically the story is that, you know, there's a, there's a cut in the nominal rate and the distance into a cut in the real rate and through the aggregate equation that is intertemporal substitution consumes more today and less in the future. That's it. That's a story. In the originalization model, you see that the intertemporal substitution is still there. Right. And it's, it is relatively rare, but the dominant channel is our indirect, indirect effects. So, so what happens here, basically, you know, at the very beginning through intertemporal substitution, because the initial, initial channel, the initial impulse has to happen through intertemporal substitution. So, so what happens here is that the internal consumption of the material is increased in the demand for consumption is increasing in the consumption, increasing not for labor and increases employment and wages. In this additional labor income partly or largely depending on the model is specified goes to the low liquidity high-end PC households who increase further than the natural consumption. And because these are going to mention that especially strong because of the aggregate. Okay, so the transition mechanism is different. And this clearly has implication for, you know, the way we understand the thing about monitoring. Okay. So, so let me come back on this point here. You may think it's kind of surprising because you might have expected that in the generalization model, perhaps that there should be an amplification of the impulse to this large accuracy. So, let me, let me move to the, to the issue of identification. And before I do that, I want to make one point clear that, you know, so far, essentially, I talked about basically the role of the wealth distribution. Right. The wealth distribution and portfolio composition that the term is the alternating PC and the size of PC and therefore the style of the directory. Okay. And from now on, I will mostly discuss amplification and in application, the income distribution as a key role. Okay. So, before I move to amplification, there is one, I think additional dimension of this model that is they want to talk about because it's especially, I think, interesting in the way it can conditionally connected with the micro data, which is the transmission mechanism of the shock across the distribution. So, here's a, here's a plot of basically the percentage change in consumption expenditures in the cross section as a function of the percentiles on the web. You see, it has kind of this shape. So, let me explain where this shape is coming from. So, again, you can split this, this response essentially between direct and direct effects across the distribution, across the distribution. You can do the composition that I showed you, kind of agent by agent or, you know, percentile by percentile. So, let me start from the direct effects. So, in this model, as I said, there are about 30% of households who are quickly constrained basically are close to being constrained, either because they are the zero king in the budget constraint, we have a king at zero because there is a wage between the borough and the saline rate, or because there are the credit maintenance orders here. So, for these agents, for these households, the direct intertemporal distribution channel is very, very, very zero. Then, intertemporal substitution becomes more and more important throughout the distribution, as you can see, but it's still muted somewhat near the zero king, near the borough and the saline, because of the precautionary saline. So, this is a model with occasionally binding constraint, and one thing that occasionally binding constraint will effectively, to the precautionary saline model, they shorten the time horizon, the effective time horizon in another equation. Okay, so they reduce the size of the substitution. Remember that here is an expansion of monetary policy shock, so the interest rate falls, and these are households with a low limit wealth, for whom the income effect, the negative income effect, comes to dominance. So, you have a decline direct effect here, because the income effect is very strong. So, the general equilibrium indirect effect through basically an increasing level income generated by the monetary shock is obviously, as expected, especially strong for the end-to-mountain households who have high NPC. And then, you know, the NPC remains slightly higher here than the top, so this effect cannot decline, but it kind of dominates for the end-to-mountain households. The important thing is that, to notice here, that these different forces play out at different points in the wealth distribution, so that the transmission mechanism is kind of complex. And I want to conclude this discussion by saying that, you know, there is already some broad empirical support from microdata to these transmission mechanisms across distribution. I know of papers that use high quality microdata, longitude microdata from Denmark and Norway, UK and the US, and my own work with HIRCA, Slackalike and RSEP-STAN, that uses the HFCS data for the EU area also provides some support to this. Okay, so let me turn to amplification. So, as I said, you might have expected that perhaps a larger share of end-to-mountain households and end-to-mountain households are kind of connected with the amplification of the shocks. And at least a first pass of the data seems to suggest that it's the case. Okay, so this is, it's a recent paper that puts together evidence from the EU area, different common monetary shock and different effects across different countries of the EU area. It seemed to find a positive relationship between the cumulative effects of an expansionary monetary shock and the share of end-to-mountain households. In fact, fairly strong effects, you see, of the order of a factor of three across countries. Let me investigate a bit more deeply into the application. So, I'm going to start from this equation, which relates basically in the change in individual consumption to the margin of consumption and the change in individual income. And I'm going to think of the change in individual income as the change in individual income across the whole distribution, which is due to the monetary contribution. Okay, it's easy to show that you can rewrite this equation here in this way, which is basically a product of the income weight, MPC, the elasticity of individual income to aggregate income. Okay, so basically how income, at very point, at different points in distribution, responds to the shock, times the change in aggregate income induced by the monetary contribution. The total change in aggregate consumption induced by the change in income, what I call the indirect aggregate effect, can be obtained by just, you know, integrating across the households with this expression, and you get this simple expression. So, what you see here is that, I mean, obviously, it seems to be true that, you know, the larger, the largest, the MPC, obviously, the larger is the aggregate effect, which is something that the previous plot suggests. But what is also key, particularly key, is that what matters is the covariance, right, this kind of covariance between these elasticity and the MPC. So, there will be amplification if the monetary shock redistributes towards high MPC households. Okay, that's kind of, that's kind of one of the key, let's transform this plus or minus. What makes things a bit more complicated is that the income composition varies across the distribution, right, this is sort of, this is sort of total income, but, you know, total income is, you know, my labor income, capital income, business income, global transfers, and all these different income components, which is called differently to shocks and to monetary position. Okay, here's an example of the composition of the income across the quantize of the income distribution. You know, the bottom 20, the middle 20 and the top 1%, the bottom 20 is actually mostly global transfers, the middle 20 is labor income, the top 1% is kind of half and half labor income, but capital and business income are particularly important. So, depending on, you know, which of these components is not the most, you know, you would expect the many MPCs, how you steer, how you steer, then depending on how these three components respond, you can get different configurations of amplification or dampening. And the other thing that I want to emphasize that is important is that the fiscal response matters, right, I mean, the fiscal response matters in these models, because the fiscal response when I wanted to put it short, how the government budget constraint adjusts when say, interest payments fall, because in this model, we carry the equivalence price down differently from the representative model. So, I was just going to give you, like a flavor of how things, complicated things can be, complex things can be. This is an estimate of the elasticity of labor earnings to a change in income, is what Fatiguven and Motto Diogo and essential overall kind of workers beta, the sensitivity of earnings across the distribution to aggregate income. This is not conditional monetary quality short, conditional 20 short, it's not, it's not exactly what we want. I mean, it's kind of an unconditional estimate, and you can see that it's kind of, there is something that I think you would expect, right, that at the bottom, the elasticity is higher, precisely because, you know, of unemployment, of extensive marginal employment and employment that affects a lot of individuals at the bottom of the program. But you see also very high elasticity for the very, very top of the early distribution, and we think that this is related to kind of performance based pay is also extremely cyclical. Okay, so if you feed in these elasticity, for example, in this form, it's not clear that I get amplification. It depends a little bit on distribution of NPCs. Okay, okay, my last slide before I conclude, you know, in this, in this, the conclusion that I show you, I kind of talk as if the NPC, the aggregate NPC is constant. But obviously the aggregate NPC is an equilibrium object. It's given by the distribution of NPC in combating, and it also, it's also responsible, right. In particular, what matters for the, for the, the dynamics of the NPC, and therefore amplification versus dampening is the precautionary saving model. Okay, and here, counter cyclical using static risk, we know it's an important source of amplification of monetary policy shots. Okay, we know that using static risk is counter cyclical. It increases the recession, but it's the skewness of the, of the labor earnings innovation that is in recession. And so, you know, after an expansion of monetary shock, unemployment risk falls, right, you go kind of from the red line to the blue line. What happens is that the precautionary saving model weekends and the aggregate NPC rises. And these generate a further increase in consumption expenditures that further applies the initial role of the monetary shock. And I want just to say that, you know, this, this insight about the role of the cautionary saving has been in this incomplete market literature in a long time. And I think Ricardo Caballero was perhaps one of the first to point this out in his, one of his, one of his papers. But, you know, all we're doing here, basically by merging this literature with the, with this new case and block is to explain how all these things can be relevant for monetary policy. Okay, and I, my timer, and in fact, I'm on my last slide here. Okay, so just taking stock. You know, we, we, in this research program that, you know, many, many people contributed to many of whom, I'm sure are listening to the conference. The distribution of income and wealth is also central to market economics. And a political grounded approach, right. Alters, what we're introducing to this model alters an important position. The wealth distribution and portfolio composition, the term in the distribution of disease and the strength of the direct and direct generation channels of monetary policy, which one dominates itself through which basically challenges you have to think through when you want to try to forecast or understand effects of money. The income distribution and the composition of income, the term in the redistributed consequence of monetary policy, and also the amplification or dampening of a monetary policy shock, relative to, say, a baseline standard representative. And I, when you say conclude, thank you very much. Stay safe. Thank you very much. Thank you very much for this very clear exposition and for clearly highlighting why as a central bankers, we should also look at micro data and look at the distribution and understand these effects basically. We already received some questions in the Q&A session. There were two questions that basically boiled down to the same. So I'll bundle them. They came from kind of Alta villa and Klaus mazu. Basically, the point is that in your paper and your presentation module policy is basically an interest rate policy. And the question is, how much do these distributional consequences really depend on the policy measure that the central bank deploys. I mean, you know, we're going more and more into what you call non standard or unconventional measures. So how would your conclusions change of the paper if you think for instance of QE instead of an interest rate policy for for the channels. Thanks. This is, this is a great question. There is already some work being done that tries to understand the effects and the transmission channel of QE in this class of models. I'm going to cite one paper. I'm sure I'm going to, I'm forgetting others, but it's a paper by way cooling is a spark that uses a DCL that uses precisely to think about QE. Now. Okay, so a couple of things. So the first is that I think this is a very natural. A very natural framework to think about QE, because you have these two assets, right, which are liquid assets, a gold, bonds or bank accounts. And the other one is, is this illiquid asset. So, so say housing or when I think about the financial equivalent would be like mortgage. So, you know, it's very natural to think about QE as doing a liquidity swap, for example, in these models. And the QE and start paper is precisely about that. Now, if in terms of the composition that I talked about, the effects of QE are essentially entirely general. There is no direct effect on consumption. There is no direct effect of QE. Everything goes through their general effect on prices, on asset prices. And here's where I have to say, this is not yet, this model is not yet ready in a way for, at least in the information that's shown for this type of analysis, because as Ricardo has highlighted this presentation, you know, a huge component of the way we think about financial markets is risk, I think risk, the traditional risk across assets and so on.  Now, again, there is interesting work being done. And I'm going to cite the paper by my colleague Moritz Lenin, who has introduced heterogeneous preferences, the heterogeneous conversion to this model. And by doing that, you can get, basically, larger couldn't bring up, you can get, you can get time value, the bike over the cycle. So that is, I think the framework is getting ready to already to answer these type of questions. And the race, you know, in terms of like the distribution effect, in terms of distribution effect, it would be kind of a race between, you know, how strong the effects of free are on, say, asset prices, and therefore something that, at least on paper, tends to favor the high income high wealth people, versus the effect on sustaining the working market wages, which is something that would affect the lower end of the institution. I think the jury is still out there, both empirically and theoretically within the classroom models. Thank you very much. We have received also another question by Anton Nakov, which is whether monetary policy should explicitly target wealth or inequality. And if so, how? Okay, so this is a question that's, that's, you know, that's the question that you like at this conference. I'm not going to give you a yes or no answer, obviously. But it's a great question. It's, it's, it's, it's a question that is the object of, again, a number of papers at the very frontier of this literature. I have two, just because they're the ones that I'm, they come to mind. And the three is one paper by Tom Sargent might go also. There's a paper by Zedir Ago and co-authors. And there's a, there's a paper by Floridini and co-authors, which actually is kind of neat because it represents the issue analytically. So these are, they're complicated, they're complicated models. And the answer depends a lot on the, on the social welfare function. It's a question about that policy. Okay, so that's what we're in the Ramsey world. Let's stay in the Ramsey world. It depends on the social welfare function that you write. You know, the social, the general social welfare function, the general social welfare function would have a model for redistribution in this incomplete market model, the model for social insurance. And then there's the classical stabilization. You have it in your case. Now, I can tell you that one thing that comes to, that emerges from this literature, almost a university, is that the answer depends on the existing fiscal instrument, the existing fiscal policy that is available. Okay, so if fiscal policy is rich and is close to optimal, then fiscal policy should do the job of redistributing and providing social insurance. And then what is left for monetary policy is largely, is largely kind of stabilization. Let me just say that even if that is the case, okay, discuss some models remain, I think important because it tells you that the transmission mechanism monetary policy is different. The way the monetary policy stabilizes the economy is different from what you were previously thinking. So the question is whether, you know, fiscal policy is close to optimal or not, or whether it's whether over, over a dozen distribution under a dozen distribution under provides social insurance and so on. So it's a question that I think can only be answered conditioning. Thanks. I have another question from Anton Nakov. The first question was now whether monetary policy should target explicitly wealth or income inequality. His second question is, can inequality concerns inform questions on the optimal inflation rates and, you know, whether we should focus on inflation targeting versus makeup strategies. And of course makeup strategies very much here also in the limelight these days and central banking after the Fed's decision. So what would be your views on that? So that's another great question. So my view here is that there is maybe one important dimension that, you know, if I, if I, you know, that I think it's interesting. It's interesting to develop within these models, which is that it's something that people have shown that different households across in different points of income and wealth distribution consume different bundles, consume very different bundles. And as a result, they have different inflation rates. Okay. They also hold different, different portfolios of nominal assets. And so they are also subject to inflation differently depending on how much nominal wealth they have in their portfolio. So overall, what I would, what I would say is that, you know, the, the redistributive impact, and, and therefore, you know, the, the, the, the strength and the transmission mechanism is even a little more subtle than what I show today, precisely because I think you were to enrich the model with this element where there are different goods and people across the institution consume different, different bundles of these goods and these different bundles of the goods respond differently to inflation. And then I think the, the, the, the, the, the whole transmission mechanism of monetary policy and perhaps even inflation dynamics of the whole could be very, very, very, I don't know.


Hey, this is Brett and this 2021 Chrysler Pacifica Limited All-Wheel Drive is stock number 24T99A. I am here at Summit Automotive in Fondlack, Wisconsin. Your new and used Pacifica and minivan headquarters. This 2021 Chrysler Pacifica has the 3.6-liter Pentastar V6 engine. It is paired up with the 9-speed automatic transmission. This vehicle has been fully-safetyed and inspected by our service shop per the state of Wisconsin inspection process. It has a fresh oil and filter change. All the fluids have been checked and topped off and this vehicle is 100% ready to go. Super clean all the way around and that's exactly what I'm going to do in this video. Go all the way around inside, start it up, take a look under the hood, show you all the options, and give you the most accurate representation that I can of the vehicle. Fathom Blue Pearl Coat is the color. I shoot all my videos in 4K. If you like the video, subscribe to the YouTube channel, click the bell notifications and get updates on the videos I do each and every day and that's your best way to stay current on our ever-changing and vast minivan inventory here at Summit Automotive. This one comes with the 18-inch polished aluminum wheels. They are in fantastic condition and it has KUHO Solis 235 60R 18 tires. I would say these tires probably have 80% of the tread left, maybe even a little bit more. Front wheel is in excellent shape. Front fender is in excellent condition as well. I didn't see any dents or dings on there. This one does have the LED headlamps, running lights, and fog lights. I'll turn all those on at the end of the video so you can see just how bright they are. Front bumper is absolutely perfect. No scuffs, scrapes, cracks, or anything like that. Does have the 360 camera. This one has the safety sphere group. The hood is in excellent shape. Didn't see any major dents or dings on there. And the passenger side front fender is in fantastic condition as well. No dents or dings on there. Passenger side front wheel, no major scuffs or scrapes. Check out this Fathom Blue Pearl Coat. It's got a lot of metal flake to it. Some greens, some blues, even some gold flakes in there. Looks really good. You can see just how nice that paint is. And as you go down this side of this 2000 and 21 Chrysler Pacifica, just take note of how clean the body is, and once again, how reflective and mirror-like that paint is. I take these HD videos so if you are far away, or even if you're close by and you just cannot make the trip down, but you're still interested in purchasing the vehicle, you can see the vehicle, hear the vehicle, and have confidence in what you're looking at before you even get here. So when you do get here, there's absolutely no surprises. And you can make a smart and informed buying decision from wherever you're at. If this video helps you make that buying decision, let your salesmen know that you saw the video that was helpful. That Brett sent you back wheels in excellent shape. Four-wheel disc brakes on here. These back tires have just as much tread as the front tires. And coming around to the back of the vehicle, rear bumper is in great shape. It does have the towing package that is from the factory. Four-pin and seven-pin wiring, backup parking sensors, and the tailgate is in really nice condition as well. You get the LED tail lamps. This is a power lift gate. Back storage area is in very nice, clean condition. It does have a subwoofer back here. That's your stowing vac. So it has the built-in vacuum cleaner. And then these seats, they fold down. They are a power stowing go. You can see they go like that. You can see just how nice and flat they go.  Press the button to get the gate down. It'll beep at you three times and then begin its descent. Coming around to the driver's side, just as clean as that passenger's side. No major dents or dings. It does have the integrated roof rack rails, kind of a hideaway system. Rear quarter is in excellent condition, no dents or dings in there. And for full disclosure, this back wheel just as nice as the rest. Looks really good. And down the rest is the side of the van. Doors look really good. It does have the blind spot monitoring, heated mirrors, built-in directional signals, 360 cam, enter and go system, power sliding side doors. And the second row, you get the Mocha Brown Leather Captain's Chairs Latch Child Safety System. You can see it does have the side window shades, which you can do on that one as well. The rear air controls, these second row seats are heated. There's your stowing back right there. Third row seats are in fantastic shape, no rips or tears back there. Carpetting is in very nice condition. And to get these second row seats into the floor, there's the stowing go assist. So that button will put the seat all the way up to where it needs to go. And then you can get this down, and this one has the part of the vacuum cleaner in there to get these into the floor, just kind of put it down like that. And you're all set to go. And you can do that to both sides, so you get a nice flat area. And then to get them back out, just as easy. That's your tire inflator kit there. Just grab the stowing go strap, pull up, and you're all set to go.  You get a USB and USB-C plug-in on both the front seats. And to get this door closed, you just press that button there. Up front, you get these same mocha-brown leather captain's chairs with the gray piping. No rips, no tears on these seats there in fantastic condition. You get a set of Husky all-weather floor mats. Up front, auto headlamps, tilt, telescopic steering wheel, power windows, locks, and mirrors, Harman Kardon premium sound system, memory driver seat, and these mirrors do power fold in. I always like showing both sides so that you know that both sides are working properly. Up inside, check out the miles, the radio, and everything that this one has to offer on the interior. You can see this one has 30,114 miles on it. You get the seven-inch LCD display, digital speedometer, instrument cluster is very nice and clean. You also have a compass display on there. Comes with the heated leather-wrapped steering wheel, black and mocha-brown, adaptive cruise controls, regular cruise controls, Bluetooth and information center controls on the left. You get the UConnect 10.1, UConnect 5 radio. This one has AM, FM, and SiriusXM radio capabilities, as well as Bluetooth, USB, AUGS, and a second USB.  This one has the factory navigation system. There's Highway 41, so that is working nicely. Then you get all your different apps on here. I'm not going to go through everything, but kind of show you just what's all on here. Basically, a lot of this stuff is just links to other parts of the radio. We will check out the surround view camera, so you can see all the way around the vehicle there. You get a wide view of the back, a wide view of the front, and a narrow view of the front, and then to hook up your boat camper or trailer to that hitch the first time, another time, and you can zoom in on that hitch for even better results. So that's everything with the radio. You get this nice gloss black trim around the radio and around the center stack controls there. This is your perpendicular and parallel park assist, parking sensors, you can turn those off and on, lane departure warning, start stop capabilities, and your stability control. Obviously, mute, screen off, hazard lights, dual climate controls there. This is your transmission shifter for that nine-speed automatic. It does have the push-button start right there, and your electronic parking brake. You get this gloss black slider there, wireless cell phone charge pad, two USBs, two USB C's and an aux jack, and your keyless entry with remote start, power sliding side doors and rear gate button, and two cup holders here. Passengers side floor mat and seat are in excellent condition as well. No rips or tears on there. So you get the second row fixed glass with the power sunroof in front, and one thing I forgot to show you is that third row actually has a skylight to it as well, so it's an all-glass roof on this one pretty much. And yeah, it does have the third row skylight. You get map lights up here, sliding side door and rear gate buttons. This is your sunroof controls, your sunshade controls, assist and SOS buttons, and your home link buttons for your garage door security systems and lighting systems. Let's start it up and take a look under the hood. Starts right up. No check engine lights or anything like that. I would personally like to thank you for checking out the video today, and hopefully from this HD video you've been able to verify the quality, condition, options, and of course, cleanliness of this van all the way around. This thing is in fantastic shape and see just how bright all those LED lights are, and really a nice van for the price on it in the year, miles. Under the hood we have the 3.6 liter Pentastar V6 engine, engine bay is very clean, runs very smooth. Once again, this van has been fully safe and inspected by our service shop as a fresh oil and filter change. All the fluids have been checked and topped off, there is the emission sticker. And this van is 100% ready to go. I would highly recommend it from a quality and condition standpoint. I would ship this one anywhere in the country, California, Texas, New York, Florida. Whoever is going to get this van is going to be very happy with it. And to see more pictures of this van or one of our 550 new and used cars, trucks, SUVs, minivans, wranglers, you name it, we got to go to the website right there, summitauto.com. Full pictures and descriptions of every single vehicle, all at summitauto.com. And if you want to check out more HD videos, you can go to youtube.com slash summitauto.com. Click the bell notifications, get updates on the videos I do each and every day, as well as having access to one of the largest catalogs of vehicle and minivan walk-arounds on YouTube. And stay current on our ever-changing and vast minivan inventory here at summitauto.com by clicking those bell notifications. In fact, in a second, you will see a link to subscribe to my YouTube channel, The Upper Left. A link to all the Chrysler Pacificas I've ever videoed in the upper right, a link to this vehicle on our website, and a link to one of our latest YouTube videos on the lower right. Click those, check us out. 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Welcome to Global Report. I'm your host, Lollie. Joining us today is Mr. Mark Cohen. Mark is the CEO of Legal Mosaic and the Executive Chairman of Digital Legal Exchange. He's also an author and contributor to various journals, including Forbes. Mark has also lectured at Harvard, Oxford, UCL, IE, and several other leading global institutions. Welcome to the show, Mark.  Well, Mark, it's 6am here in Singapore, so if I were to yon at any point in time, it is me, not you, all right? I'm glad to know that, and I appreciate you getting up so early. Now, Mark, in addition to the accolades that I had just mentioned, you are also a critical player in the legal scene of Singapore because since 2018, you have been our catalyst in residence at the Singapore Academy of Law. Tell us what does a catalyst in residence do? That's a really great question, and I wish I could say that I was the one who suggested that title, but it was the Singapore Academy of Law. I guess in plain terms, a catalyst is someone who makes things happen, or participates in group activities that result in things happening. And so when the Singapore Academy of Law approached me back in 2018 to consider a role, they had in mind some things, and one of the things that they had, I think, was to get someone who had a long and somewhat global familiarity with the legal industry, how it intersects with business, how it intersects with technology, and to sort of take a very fresh, no-holes-barred review of some of the initiatives that Singapore was engaged in with an eye towards providing constructively critical counsel. Now, you know, a couple of months back, I saw this blaring headlight, talking about legal tech in Singapore. I saw this blaring headlight about Singapore being the shining light for legal technology in Asia. But I think if you go to the street, if you talk to the men on the street, we will not be too convinced. And the reason is, I think that any kind of technological advancement has to bring the entire population along with it, and the people on the street are feeling a little laptop because there is no relevance shown to us with regards to the new gadgets, the new technology that all the lawyers and the judges get to utilize. Are they passing on the cost savings? Are they passing on the time savings? What I'm trying to say is that it means very little to the men on the street if we are not shown to benefit too from all these legal innovations. Well, I couldn't agree with you more, whether it's the man on the street or the woman on the street, or whether it's a very large company. For technology to be material, it has to have a use case. That is to say, it's got to be used and applied to solve a problem or to make a particular process more efficient for the benefit of the ultimate consumer. So I come from a background of trial law. Some evidence never even sees the light of day, because it is not material, it's not relevant to the matter at hand. I think that so much of technology is the same. If there is really no use case, then what purpose does it serve? If it is so complicated that users are absolutely timid about the very prospect of trying to learn it, it has very little utility. So I would say in terms of being able to convince the man in the street as to the importance of technology, I would start by saying by using this piece of technology or adopting this app, it will help you to fill in the blank. And I could give you many examples of filling in the blank that have made a real difference for people around the world in recent times, particularly I think since COVID, which is really serving to accelerate change in ways that I think are very daunting, but ultimately I do think that some good things can and will come out of it. Well, let me allow me to give an example of a blank that has not been filled. For example, back in 2013, seven years ago, Singapore allows for law firms to utilize electronic litigation to do their filing from the comfort, the ease and the rapidity of their computers but such a service is denied to the litigants in person. In other words, today if you are not represented, this is the process you have to go through, you have to type out your affidavit, you have to collate your evidence, you have to print it out, you bring it to the human commissioner, you get his manual signature, you get his manual stamp, you scan the whole damn thing and then you take it to one of two filing bureaus in Singapore, get in line for two to three hours and maybe then and only then do you get to do the same thing as lawyers get to do from their computer. So this is why I raise my concern is that is all this legal innovation going to benefit just a small segment of the population, just the legal industry, or is this also going to translate into time and cost savings for the man on the street? Well now we're talking really more about economic issues I think because certainly the potential is there for technological tools to serve, better serve, the man in the street. That capability is there, it's being applied in other jurisdictions. I think part of the problem is that law has always thrived on its artisanal approach to things on the fact that lawyers would claim that no two cases are alike and that it's very labor intensive and that ultimately it's not so much the result or the outcome, but it's the input, the amount of work that was put into it and whether lawyers, not customers, think that they have done a really good job. Now business as we know operates just an opposite set of metrics. That is to say for business to be successful it must be customer-centric, it must be accessible, it must be efficient, it must be competitive, and it must be looking for ways to constantly improve customer access, satisfaction, and experience. So I would argue that it would be a very positive thing if lawyers who are in the so-called retail segment of the legal world, that is to say not corporation, lawyers representing large corporations, but rather lawyers who are representing the man in the street. The problem is that most men on the street can't afford lawyers in the first instance because those lawyers are not themselves making use of the tools that are available, and I'll go one step farther. There are a lot of lawyers who say yes, but technology is inimical to my well-being financially. If I start being able to do something in 10 minutes that I used to spend an hour on will then look at all the money I'm losing. I would flip that around and say that if you could do it in 10 minutes you could lower your price and you could service that many more people, that much more effectively, and by the way you could get other people to do a lot of the machine work and you would be liberating to do the very activities that you thought or hoped you would be doing when you graduated from law school instead of doing grunt work. So I think that what it really requires in my mind, Lily, is an explanation making a case both to the lawyer as well as to the man on the street, and I think it's just really a question of aligning the interests of the two because surely the tools are there for law to do a whole lot better and for customers in turn to have a whole lot better view of lawyers. You know that's interesting you should mention that because I feel that as a consumer looking at a lawyer the legal industry does not behave in a manner typical of other industries. For example with other businesses we as consumers would want to rate the service that we have received so take for example Grab which is the local Uber you know at the end of a trip I will rate the driver if I were to order for service delivery half an hour after delivery they will invite me to comment on the food that I have tasted and that kind of feedback is invaluable to the next customer in his or her decision making but when it comes to the legal industry I see very little very few feedback mechanisms available what are your thoughts on that? I completely agree with you and I will tell you that 13 years ago when I co-founded this company called Clarice Byer we were looking at that and that was before Uber ever came into existence and we thought to ourselves how can we both internally rate the efficiency and the success with clients of our lawyers internally and then how can we in turn gather data on how our clients perceive the lawyer's performance that is how we are going to gauge effectiveness that was 13 years ago fast forward to the present there are certainly platforms there are tools that are available and this raises another point Lily which is I think that law can and must do a better job of borrowing from other industries part of the reason it doesn't is because historically it has operated as a kind of an island or fiefdom or guild unto itself but in today's world it's not just about legal expertise it's also about business expertise it's about technological expertise it's about using technology to achieve efficient effective scale and it's about all these other things of which legal expertise is just one ingredient it is not the entire dinner and so for all those reasons there are people out there who are working hard to bring these kinds of ultimately mindsets to the delivery of legal services whether they're for the man or woman in the street or whether they're for the tamasics of the world now I have actually seen competitions calling for ranking of law firms it's just that the input doesn't come just from the public as actually comes from the law firms themselves I'm not sure how authentic those kind of rankings are if the lawyers get to rank themselves and it's a bit bizarre to me because seems that lawyers are the only professionals that rid themselves so I'm very glad to hear from you that even since 13 years ago there's been efforts to put fit that mechanisms available because those kind of things will truly empower customers in their decision making I say all the time how is it that you know I have more information in terms of getting into an uber or whatever the the right mailing service might be or if I want to um uh lease an apartment I want to go you know to Germany and instead of staying in a hotel I want to stay in an airbnb in matter of moments I can get all sorts of reviews I have all sorts of information I know exactly what to expect and what others say whether or not my expectations met their experiences and yet you know having uh been at bet the company trial lawyer for the first 30 years of my career people just went on the fact that well you know other people would say hey Mark's a really good lawyer but there was no data to back it up and I knew lots of lawyers who you know were really quite poor in terms of what their trial skills were and yet they were perceived as great lawyers um you know if if you can do that getting into a ride hailing service I've got to believe that you should be able to do it getting a lawyer and just one more thing to add to it um a few years ago I had a serious health issue which very happily has resolved itself completely and and and it's it's long in my uh rearview mirror I raise it for this purpose um when I was initially given the diagnosis I was looking for every piece of data that I could possibly find in terms of what the best places to go were who were the people who had conducted the most procedures of this kind what were their results I was looking for data much the same way the CEO of a company is going to be looking for data I often say that lawyers uh how many times have you heard a lawyer say my nose tells me this or my gut tells me that you tell that to a business person and they think it's comical um we should we should not be rendering advice by our anatomical parts save that for other things we should be doing it on the basis of data and our prospective customers and I use the word customer very intentionally our customers should have access to that data too before they decide whether or not to engage a particular lawyer so I mean why do you think the law industry has been so slow when it comes to adoption of technology technology I don't know if you were here at the tech law conference last year I believe you were I think I saw your name on the list but I recall this uh demo that our law minister Shamu Gam showcased to the audience in his demo he pitted 20 highly experienced lawyers against artificial intelligence to review five identical contracts it took the lawyers 92 minutes and it took AI just 26 seconds not even half a minute and with far less errors than the lawyers incurred so it was evident that you know legal tech has a vital role to play in the industry but why has the industry been so slow and resistant when it comes to adoption of technology if you look at travel if you look at medicine you look at retail you look at banking you look at finance even property real estate they seem to have lacked the legal industry in the dust when it comes to tech adoption could you explain that resistance please sure well I think there are several reasons one is legal culture remember that for a very long time um lawyers sold one thing and one thing alone and that was legal expertise um and they were the only ones that had it and in fact it you know up until the last 25 30 years ago um unless you were a lawyer you couldn't get into most law libraries um and so it was not only the legal expertise but it was the access to the source materials um okay so one thing is that lawyers have long had a monopoly um and their whole economic model their entire modus upper rondi has been built around that monopoly um now um and that monopoly of course says that the more input I have the more time I spend the more I'm going to be rewarded regardless of what the output of that time hits um so part of it is clearly economics I think another part of it is the fact that um a lot of lawyers feel that um technology is you know if they had wanted to study technology if they were interested in data and science they would have gone to medical school um but they ended up going to law school because it was you know a lot more you know sort of uh talk um and I find that really you know somewhat ironic because as a trial lawyer it's not about talk and supposition it's about evidence and how you can prove things so um and the other thing is I often cite the example of you know why is it do you think and of course I'm asking you rhetorically why is it that you think if if you talk to most any lawyer she or he is going to have a smartphone um they're going to use all sorts of apps they're going to take the same ride hailing service that you do um they're going to perhaps go use air bnb on the vacation so they are not you know complete tech luddites in their personal lives and yet in their professional lives knowing that technology you know can have many very positive consequences why is it that you know in their professional lives they choose to resist it and I think sadly it's it's it's very much a question of you know we don't need technology or it requires our particular brand of expertise or it's going to make me redundant in the end and I would argue to that it's you will become as a lawyer redundant in the next few years if you don't adopt technology if you don't understand what its potential is and more significantly you go beyond just basic legal expertise and you start learning other skills because lawyers in the next few years are going to function very differently most of them than when I was a baby lawyer I think you just called out the elephant in a room right there I think it's their fear of redundancy their insecurity about their jobs because I recall this webinar that you and Richard Soskin did at the Tech Law Fest this year a lot of the questions that came from the audience had to do with the lawyers their likelihood their insecurity about their jobs but you know have we gone so far away from the meaning of law that we have forgotten that laws were not erected to provide jobs for the lawyers the laws were erected to provide empowerment restoration and protection for the people how can we reinstill this value into the lawyers well that's a great question and I think one way is through a open and competitive marketplace and I think you're beginning to see that you're beginning to see law companies who do not necessarily engage in the practice of law but who are very very adept in delivering efficient effective cost efficient and valuable services and they're able to do it quickly predictably and at scale a couple examples from the states legal zoom is a well-known company that started out as a legal document company and now it does much more there's a young fellow who is a computer science whiz I first met him when he was a sophomore at Stanford University he was in studying law he was studying computer science but he was kind of using about many of the questions that you asked me why is law so resistant to technology why can't technology be used and he started a suite of apps called do not pay it's now mushroomed in there about 100 different apps that actually could be used with the click of a button to solve real life problems so for example he did an app right after covid hit which allowed people to you know be able in all 50 states in the states to be able to somehow navigate through the very complex forms for unemployment insurance these are real life tools that you know are not going to replace lawyers but are certainly going to make certain types of widespread legal issues more readily resolvable and at scale and certainly the potential and I know Richard talked a lot about remote courts something that you inverted to at the beginning of our conversation there's certainly a potential for that as well not just you know having courts as a place where people go with robes and in England you know wigs but courts are more of a process and there are places now where courts are starting to use technology to allow people who cannot afford law but need legal services to be able to have access to self-help tools and to be able to you know without either side hiring a lawyer be able to you know tap into things that will let people know here's the law see if you can solve this yourself because not all disputes require lawyers in fact I would argue that far far fewer disputes and most people would imagine do not require lawyers and could readily be resolved either by the parties between themselves or with resort to other tools yeah along with that one of the catch phrases that's been buzzing around in the legal scene not just in Singapore but globally is access to justice and before I tap your brains on how legal tech can bridge this gap between the law and the legalness of the people could you share with us very quickly how policymakers have been attempting to address this issue well they've been doing it in different ways Singapore I know the access to justice crisis there though it certainly exists and I don't have any hard data but I've been told by reliable sources that the about 30% of the population in Singapore who would you know want or need access to legal services effectively are denied them because they simply cannot afford them hopefully that is going to be further reduced but to you know contrast that with the United States and the UK is pretty much in the same zip code on this in the United States 85% of all Americans who are in need of legal services they're going to be evicted you know they want to be able to avail themselves of the fundamental constitutional slash legal right but can't because they don't have a lawyer can't afford one 85% of Americans can't afford a lawyer and two thirds of all American businesses when confronted with serious legal issues can't afford a lawyer that is a true tragedy and that really speaks to the fact that the legal profession can and must do better and the tools exist and to your question of the regulators unfortunately in the United States for example the American Bar Association which in effect oversees the state bars that set you know the particular practice roles has really I think been very hollow and has taken some cosmetic steps to try to address access to justice but as lawyers would say the matter speaks for itself you know the statistics I cited are really abysmal and shocking and it by the way it's also you know very detrimental to democracy how can people have faith in the rule of law if you know the law is not accessible to them even when they need it and so I think that you know regulators can and must play an important role in the UK for example there was what I would call a re-regulation not deregulation but a re-regulation that liberalized you know various regulations that had formally prohibited a non-lawyer ownership management in organizations that provide legal services these are the kinds of things I think that are necessary I'm really all in favor of a marketplace that's not to say that you you you you abandoned any protection of the public from charlotte's but at the same time you have to weigh you know the protecting the public from the fact that the current rules are preventing the public so you can't protect them if you've already effectively you know prevented them from being able to get access to services so I think that regulators must play a role in this process so must the judiciary so must lawyers themselves yeah thank you so much Mark unfortunately our time is up and I still have questions that I want to take your brains off I think we might have to have you back for another show if if your schedule allows I would be delighted thank you so much because I hate to squeeze in all the critical points I think these are issues that need to be addressed so thank you so much Mark I know it's near your bedtime and I commend you for the amazing work that you are doing I think what you're doing is going to bring make a tremendous difference to people beyond your state your town and your country and your efforts your mission to design a system that work more effectively for more people is truly an honorable one so I wish you all the success there is and I look forward to seeing you back on another show I look forward to it Lily bye bye now thank you very much thank you bye