Innocent Bystanders? Monetary Policy and Inequality in the U.S

John Silvia, Lorenz Kueng, Olivier Coibion and Yuriy Gorodnichenko

No 2012/199, IMF Working Papers from International Monetary Fund

Abstract: We study the effects and historical contribution of monetary policy shocks to consumption and income inequality in the United States since 1980. Contractionary monetary policy actions systematically increase inequality in labor earnings, total income, consumption and total expenditures. Furthermore, monetary shocks can account for a significant component of the historical cyclical variation in income and consumption inequality. Using detailed micro-level data on income and consumption, we document the different channels via which monetary policy shocks affect inequality, as well as how these channels depend on the nature of the change in monetary policy.

Keywords: WP; monetary policy shock; labor earnings; rate of inflation; business income; Monetary Policy; Income Inequality; Consumption Inequality; composition channel; household income; income side; effects of monetary policy shock; income category; contractionary monetary policy shock; income composition channel; transfer income; Income; Consumption; Wages; Income distribution; Global (search for similar items in EconPapers)
Pages: 57
Date: 2012-08-01
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Citations: View citations in EconPapers (124)

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Related works:
Working Paper: Innocent Bystanders? Monetary Policy and Inequality in the U.S (2020)
Working Paper: Innocent Bystanders? Monetary Policy and Inequality in the U.S (2012)
Working Paper: Innocent Bystanders? Monetary Policy and Inequality in the U.S (2012)
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