Quantitative easing did not increase inequality in the euro area

Jiri Slacalek and Michele Lenza

Research Bulletin, 2019, vol. 54

Abstract: “Quantitative easing” refers to central bank purchases of assets such as stocks and bonds to increase the money supply when interest rates are too low for conventional rate cuts to provide further policy accommodation. Quantitative easing in the euro area through the ECB’s asset purchase programme (APP) has stimulated economic activity and asset prices, affecting income and wealth inequality among households. It has decreased income inequality, mostly by reducing the unemployment rate for poorer households, but also, to a lesser extent, by increasing the wages of the employed. Quantitative easing has also helped to reduce net wealth inequality slightly through its positive impact on house prices. JEL Classification: D31, E52, E58

Keywords: Household Heterogeneity; Inequality; Monetary Policy; Quantitative Easing (search for similar items in EconPapers)
Date: 2019-01
Note: 1111765
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