 Dealing with Rising Inequality: Is the Fed Up for the Task, or Will Everyone Get Fed Up?Steven Pressman Review of Political Economy, 2024, vol. 36, issue 3, 974-993 Abstract: Recently, considerable research effort has been devoted to studying the impact of monetary policy on inequality. This paper summarizes the literature on the causes of rising inequality and looks at the empirical work on interest rates and inequality. It argues that growing empirical evidence concerning the impact of monetary policy on inequality is mixed and that the conflicting results concerning monetary policy and inequality involve, to a large extent, how one measures inequality. Overall, it seems that loose monetary policy increases incomes of those at the bottom of the distribution but reduces their income relative to those at the top of the distribution. The paper also examines some post-Keynesian monetary policy rules to deal with inequality and finds them wanting in many respects. Going further, the paper argues that monetary policy is too a blunt instrument for reducing inequality and that reducing inequality needs to be the job fiscal policy, which is better suited to dealing with this problem and which has the political authority to deal with distributional problems. Date: 2024 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:revpoe:v:36:y:2024:i:3:p:974-993 Ordering information: This journal article can be ordered from DOI: 10.1080/09538259.2024.2306523 Access Statistics for this article Review of Political Economy is currently edited by Steve Pressman and Louis-Philippe Rochon More articles in Review of Political Economy from Taylor & Francis Journals |
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