Real-time ineuqalities and policies during the pandemic in the US

Luisa Corrado, Daniela Fantozzi () and Simona Giglioli ()
Additional contact information
Daniela Fantozzi: Italian National Institute of Statistics
Simona Giglioli: Bank of Italy

No 1396, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We investigate the effects of different policies implemented during the pandemic on real-time spatial inequalities in the US. We use a novel database built using anonymized data from the private sector, which enables us to compute daily measures of spending inequality at county level. Using a narrative approach combined with high-frequency data to identify the shocks, we evaluate the impact of monetary policy in a VAR framework. The main findings show that consumption spending inequality rose during the pandemic and that the Fed's policies did not mitigate this increase. Indeed, although these measures had a positive effect on spending for both richer and poorer counties, consumption was stimulated more for the former than for the latter ones. We distinguish two kinds of interventions: those regarding the federal funds rate, Repo agreements and QE programmes ('purely monetary') and those concerning subsidized lending facilities to support credit and avoid mass layoffs ('quasi-fiscal'). Our evidence suggests a greater contribution in the short run by the latter type to stimulating the consumption spending of higher-income counties.

Keywords: monetary policy; inequality; high-frequency data; Covid-19 (search for similar items in EconPapers)
JEL-codes: D31 E21 E52 E58 (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-cba and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bancaditalia.it/pubblicazioni/temi-dis ... 396/en_tema_1396.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1396_22

Access Statistics for this paper

More papers in Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().