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Monetary Policy, Inequality and Political Instability

Pablo Duarte () and Gunther Schnabl ()

No 6734, CESifo Working Paper Series from CESifo Group Munich

Abstract: Based on the concepts of justice by Hayek, Rawls and Buchanan we argue that the growing political dissatisfaction in industrialized countries is rooted in the asymmetric pattern in monetary policies since the 1980s for two reasons. First, the structurally declining interest rates and the unconventional monetary policy measures have granted privileges to specific groups. Second, the increasingly expansionary monetary policies have negative growth effects, which reduce the scope for compensation of the ones excluded from the privileges. The result is the fading acceptance of the economic order and growing political instability.

Keywords: Hayek; Rawls; Buchanan; privileges; inequality; monetary policy; order of rules; difference principle; economic order (search for similar items in EconPapers)
JEL-codes: D63 E02 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-pol
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

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Journal Article: Monetary policy, inequality and political instability (2019) Downloads
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