Five Facts about the Distributional Income Effects of Monetary Policy

Niklas Amberg, Thomas Jansson (), Mathias Klein () and Anna Rogantini Picco ()
Additional contact information
Thomas Jansson: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Mathias Klein: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Anna Rogantini Picco: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden

No 403, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: We use Swedish administrative individual-level data to document five facts about the distributional income effects of monetary policy. (i) The effects of monetary policy shocks are U-shaped with respect to the income distribution—i.e., expan sionary shocks increase the incomes of high- and low-income individuals relative to middle-income individuals. (ii) The large effects in the bottom are accounted for by the labor-income response and (iii) those in the top by the capital-income response. (iv) The heterogeneity in the labor-income response is due to the earnings heterogeneity channel, whereas (v) that in the capital-income response is due to the income composition channel.

Keywords: Monetary policy; income inequality; heterogeneous agents; administrative data (search for similar items in EconPapers)
JEL-codes: C55 E32 E52 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2021-05-01
New Economics Papers: this item is included in nep-mac, nep-mon and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Five Facts about the Distributional Income Effects of Monetary Policy (2021)
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