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How does unconventional monetary policy affect inequality? Evidence from Japan

Ayako Saiki and Jon Frost ()

DNB Working Papers from Netherlands Central Bank, Research Department

Abstract: Inequality has been largely ignored in the literature and practice of monetary policy, but is gaining more attention recently. We look at how a decade of unconventional monetary policy (UMP) in Japan affected inequality among households using survey data. Our vector auto regression (VAR) results show that UMP widened income inequality, especially after 2008 when quantitative easing became more aggressive. This is largely due to the portfolio channel. To the best of our knowledge, this is the first study to empirically analyze the distributional impact of UMP. Japan's extensive experience with UMP may hold important policy implications for other countries.

Keywords: Monetary Policy; Central Banking; Stabilization Policy; Inequality (search for similar items in EconPapers)
JEL-codes: E52 E63 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-mon
Date: 2014-05
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Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:423

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