 Unconventional monetary policy and economic inequalityEconomic Modelling, 2023, vol. 126, issue C Abstract: This paper evaluates the distributional effects of US unconventional monetary policy (UMP) implemented as an additional measure to confront recessions. In line with the literature, the results show that the UMP reduces the unemployment rate, moderately increases prices, and stabilizes financial conditions. Yet, it also increases income and wealth inequality, with a stronger effect on the latter. Central bank balance sheet policies tend to be the key measures that shape its general effects. The UMP raises capital income more than labor earnings, which leads to the relatively higher increase in income at the upper part of the distribution and as a result to the growth of income inequality. Also, the UMP increases stock prices more than house prices, which results in the relatively larger growth of wealth at the top end of the distribution, leading to the rise of wealth inequality. These results indicate the need for complementary fiscal policy measures. Keywords: Unconventional monetary policy; Identification; Inequality (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:ecmode:v:126:y:2023:i:c:s026499932300192x DOI: 10.1016/j.econmod.2023.106380 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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