Dr. Li You, Assistant Professor at the School of Business (MSB) of Macau University of Science and Technology (MUST), has published a paper titled “Do Households React to Monetary Policy?” online in the prestigious management journal Management Science, one of the UTD24, on 12 September 2025. Assistant Professor Li is the first author of the paper, marking the first time that MUST has published in Management Science as a primary affiliation, highlighting the University’s outstanding research capabilities in the field of business. Management Science, established in 1954 and published by the Institute for Operations Research and the Management Sciences (INFORMS), is one of the most historical and most influential international journals in management and operations research. It is also part of the UTD24 and FT50 lists, known for its exceptional academic reputation and international influence.
The co-authors of the paper included Associate Professor Tan Weiqiang from The Education University of Hong Kong, Associate Professor Yao Daifei from Griffith University, and Assistant Professor Zhang Jian from The University of Hong Kong. This research bridges macro-level monetary policy transmission with household-level decision-making, revealing how expected and unexpected policy changes distinctly influence household expectations regarding interest rates. Utilizing a novel revealed preference approach, the study brings a behavioral economics perspective to monetary policy research. Key findings show that households react positively to unexpected easing policies but exhibit inertia toward unexpected policy tightening, with these effects most pronounced among high-income, high-credit groups and during periods of clear Federal Reserve communication. The study provides the empirical, non-survey evidence of households’ real-time understanding of monetary policy, confirming decisions consistent with prospect theory’s loss aversion. It also demonstrates how lender behavior can partially offset the transmission efficiency of borrower interest rate adjustments. By linking central bank communication, household expectations, and micro-level financial decisions, this work offers new insights into the microeconomic mechanisms of policy transmission.
UTD24 includes 24 top-tier business and management journals, which is an important evaluation metric for international rankings of business schools. These 24 journals cover major fields in business, including accounting, finance, management, marketing, information systems, and operations management, and are widely recognized by the international academic community.
(Contributed and reviewed by Assistant Professor Li You, format reviewed by Helen Kam)
