Analyzing the Impact of Fiscal and Monetary Policies on Income Distribution in Central Asian Economies

Muhammad Azam, Zulfiqar Khan () and Yusnidah Ibrahim ()
Additional contact information
Muhammad Azam: Department of Economics, Faculty of Business & Economics, Abdul Wali Khan University Mardan, Khyber Pakhtunkhwa, Pakistan
Zulfiqar Khan: Faculty of Business and Economics, Abdul Wali Khan University Mardan, Khyber Pakhtunkhwa, Pakistan
Yusnidah Ibrahim: School of Business and Social Science, Albukhary International University, Alor Setar, Kedah. Malaysia

Journal of Central Banking Theory and Practice, 2024, vol. 13, issue 3, 109-140

Abstract: This study examines the impacts of macroeconomic policies (i.e. fiscal policy through government consumption spending and total tax revenue, and monetary policy through broad money and real interest rate) along with other regressors such as inflation, Gross Domestic Product (GDP) per capita, remittances, exchange rate, and financial development on income distribution in four Central Asian countries from 1995 to 2020. After conducting unit root tests, the Autoregressive Distributed Lag (ARDL)/Pooled Mean Group (PMG) approach was implemented for empirical analysis. The results show that both fiscal and monetary policies have positive and negative effects on income inequality. Moreover, inflation is found to increase income inequality, while financial development, higher levels of per capita income, and foreign remittances decrease inequality in the panel and individual country analyses. These findings suggest that coordinated policies, along with increased remittances and financial sector development, are needed to reduce income inequality.

Keywords: Fiscal policy; monetary policy; income distribution; ARDL/PMG; Central Asia. (search for similar items in EconPapers)
JEL-codes: D63 E62 E63 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cbcg.me/repec/cbk/journl/vol13no3-4.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:cbk:journl:v:13:y:2024:i:3:p:109-140

Access Statistics for this article

More articles in Journal of Central Banking Theory and Practice from Central bank of Montenegro Contact information at EDIRC.
Bibliographic data for series maintained by ().