Distributional Effects of Monetary Policy

Valentina Bonifacio, Luis Brandão-Marques, Balazs Csonto, Chiara Fratto, Philipp Engler, Davide Furceri, Deniz Igan, Rui Mano, Machiko Narita, Murad Omoev, Gurnain Pasricha and Hélène Poirson
Authors registered in the RePEc Author Service: Luis Brandao Marques

No 2021/201, IMF Working Papers from International Monetary Fund

Abstract: As central banks across the globe have responded to the COVID-19 shock by rounds of extensive monetary loosening, concerns about their inequality impact have grown. But rising inequality has multiple causes and its relationship with monetary policy is complex. This paper highlights the channels through which monetary policy easing affect income and wealth distribution, and presents some quantitative findings about their importance. Key takeaways are: (i) central banks should remain focused on macro stability while continuing to improve public communications about distributional effects of monetary policy, and (ii) supportive fiscal policies and structural reforms can improve macroeconomic and distributional outcomes.

Keywords: asset price channel; easing affect income; A. central bank mandate; wealth channel; A. savings-redistribution channel; Income inequality; Income distribution; Income; Wages; Consumption; Global; Caribbean (search for similar items in EconPapers)
Pages: 47
Date: 2021-07-30
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (3)

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Chapter: Distributional Effects of Monetary Policy (2022)
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