 Monetary policy in search of macroeconomic stability and inclusive growthResearch in Economics, 2022, vol. 76, issue 4, 308-324 Abstract: The question of the implication of the macroeconomic policy environment for welfare may be an empirical one, and the answer may well differ amongst economies. In this paper, we evaluate the role of monetary policy toward inclusive growth. The evidence from a large sample of countries shows that in both the short and long terms, low inflation and stable economic growth are associated with lower income inequality, improved well-being of the poor and greater inclusion. Both short-term and long-run effects are statistically significant and show that monetary policy that aims at low inflation and stable economic growth is most likely to improve permanently growth inclusiveness and the conditions of the poor. However, in advanced economies where inflation rates are considerably lower, disinflation hurts the poor and equity, ignites greater unemployment cost, and worsens growth inclusiveness. In any case, price and output stability is necessary for greater growth inclusiveness. Thus, the twin objectives of macroeconomic stability and inclusive growth offer no trade-offs. Keywords: Inclusive growth; Monetary policy; Macroeconomic stabilisation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:76:y:2022:i:4:p:308-324 DOI: 10.1016/j.rie.2022.08.002 Access Statistics for this article Research in Economics is currently edited by Federico Etro More articles in Research in Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.