The Distributional Consequences Of Monetary Policy

Author : Valentina Bonifacio,Mr. Luis Brandao-Marques,Mrs. Nina T Budina,Mr. Balazs Csonto,Chiara Fratto,Philipp Engler,Davide Furceri,Ms. Deniz O Igan,Rui Mano,Mr. Machiko Narita,Murad Omoev,Gurnain Kaur Pasricha,Ms. Helene Poirson
Publisher : International Monetary Fund
Page : 47 pages
File Size : 43,5 Mb
Release : 2021-07-30
Category : Business & Economics
ISBN : 9781513588858

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Distributional Effects of Monetary Policy by Valentina Bonifacio,Mr. Luis Brandao-Marques,Mrs. Nina T Budina,Mr. Balazs Csonto,Chiara Fratto,Philipp Engler,Davide Furceri,Ms. Deniz O Igan,Rui Mano,Mr. Machiko Narita,Murad Omoev,Gurnain Kaur Pasricha,Ms. Helene Poirson Pdf

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.

Author : Ilker Domaç
Publisher : World Bank Publications
Page : 44 pages
File Size : 51,5 Mb
Release : 1999
Category : Credit
ISBN : 8210379456XXX

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The Distributional Consequences of Monetary Policy by Ilker Domaç Pdf

Policymakers in Malaysia should weigh the distributional consequences of policy actions. They should also consider measures to alleviate the disproportionate impact that market imperfections have on small and medium-size industries.

Author : Ilker Domac
Publisher : Unknown
Page : 37 pages
File Size : 40,5 Mb
Release : 2016
Category : Electronic
ISBN : OCLC:1290705926

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The Distributional Consequences of Monetary Policy by Ilker Domac Pdf

Author : Domaç
Publisher : Unknown
Page : 0 pages
File Size : 54,8 Mb
Release : 2013
Category : Electronic
ISBN : OCLC:1404863011

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The Distributional Consequences of Monetary Policy by Domaç Pdf

Author : Davide Furceri,Mr.Prakash Loungani,Ms.Aleksandra Zdzienicka
Publisher : International Monetary Fund
Page : 43 pages
File Size : 47,5 Mb
Release : 2017-01-18
Category : Business & Economics
ISBN : 9781475568356

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The Effects of Monetary Policy Shocks on Inequality by Davide Furceri,Mr.Prakash Loungani,Ms.Aleksandra Zdzienicka Pdf

This paper provides new evidence of the effect of monetary policy shocks on income inequality. Using a measure of unanticipated changes in policy rates for a panel of 32 advanced and emerging market countries over the period 1990-2013, the paper finds that contractionary (expansionary) monetary actions increase (reduce) income inequality. The effect, however, varies over time, depending on the type of the shocks (tightening versus expansionary monetary policy) and the state of the business cycle, and across countries depending on the share of labor income and redistribution policies. In particular, we find that the effect is larger for positive monetary policy shocks, especially during expansions. Looking across countries, we find that the effect is larger in countries with higher labor share of income and smaller redistribution policies. Finally, while an unexpected increase in policy rates increases inequality, changes in policy rates driven by an increase in growth are associated with lower inequality.

Author : Mr.Olivier Coibion,Mr.Yuriy Gorodnichenko,Mr.Lorenz Kueng,Mr.John Silvia
Publisher : International Monetary Fund
Page : 57 pages
File Size : 53,5 Mb
Release : 2012-08-01
Category : Business & Economics
ISBN : 9781475505498

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Innocent Bystanders? Monetary Policy and Inequality in the U.S. by Mr.Olivier Coibion,Mr.Yuriy Gorodnichenko,Mr.Lorenz Kueng,Mr.John Silvia Pdf

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.

Author : Johnstone Nick,Serret Ysé
Publisher : OECD Publishing
Page : 336 pages
File Size : 54,7 Mb
Release : 2006-02-23
Category : Electronic
ISBN : 9789264066137

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The Distributional Effects of Environmental Policy by Johnstone Nick,Serret Ysé Pdf

This book builds upon existing literature to simultaneously examine disparities in the distribution of environmental impacts of environmental policy and in the distribution of financial effects among households.

Author : Mr.Vladimir Klyuev
Publisher : International Monetary Fund
Page : 37 pages
File Size : 51,5 Mb
Release : 2003-06-01
Category : Business & Economics
ISBN : 9781451855517

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The Distributional Consequences of Real Exchange Rate Adjustment by Mr.Vladimir Klyuev Pdf

The paper focuses on distributional consequences of macroeconomic adjustment. The preferences of economic agents over the level of the real exchange rate derived from standard models are monotonic, with agents favoring either an infinitely appreciated or depreciated rate. To generate less extreme preferences, a model is presented where appreciation would depress economic activity, while a large depreciation would hit the tradable sector by limiting the availability of labor, offsetting the favorable price effect. The model is in the spirit of the dependent economy model, but built on explicit microfoundations. The results can be used to analyze political economy aspects of macroeconomic adjustment.

Author : ZACHMANN. GUSTAV GEORG (FREDRIKSSON. GREGORY, CLAEYS.),Fredriksson Gustav,Claeys Grégory
Publisher : Unknown
Page : 112 pages
File Size : 53,8 Mb
Release : 2018-12-20
Category : Science
ISBN : 907891047X

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The Distributional Effects of Climate Policies by ZACHMANN. GUSTAV GEORG (FREDRIKSSON. GREGORY, CLAEYS.),Fredriksson Gustav,Claeys Grégory Pdf

Policymakers will not accept forceful decarbonisation policies if they lead to visibly increasing inequality within their societies. The distributive effects of climate policies need to be addressed. This report provides a selective review of recent academic literature and experience on the distributional effects of climate policies.

Author : Jaejoon Woo,Ms.Elva Bova,Mr.Tidiane Kinda,Ms.Yuanyan Sophia Zhang
Publisher : International Monetary Fund
Page : 37 pages
File Size : 42,5 Mb
Release : 2013-09-17
Category : Business & Economics
ISBN : 9781484390917

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Distributional Consequences of Fiscal Consolidation and the Role of Fiscal Policy by Jaejoon Woo,Ms.Elva Bova,Mr.Tidiane Kinda,Ms.Yuanyan Sophia Zhang Pdf

The 2007-09 Great Recession has led to an unprecedented increase in public debt in many countries, triggering substantial fiscal adjustments. What are the distributional consequences of fiscal austerity measures? This is an important policy question. This paper analyzes the effects of fiscal policies on income inequality in a panel of advanced and emerging market economies over the last three decades, complemented by a case study of selected consolidation episodes. The paper shows that fiscal consolidations are likely to raise inequality through various channels including their effects on unemployment. Spending-based consolidations tend to worsen inequality more significantly, relative to tax-based consolidations. The composition of austerity measures also matters: progressive taxation and targeted social benefits and subsidies introduced in the context of a broader decline in spending can help offset some of the adverse distributional impact of consolidation. In addition, fiscal policy can favorably influence long-term trends in both inequality and growth by promoting education and training among low- and middle-income workers.

Author : Mr. Ken Miyajima
Publisher : International Monetary Fund
Page : 24 pages
File Size : 52,8 Mb
Release : 2021-03-19
Category : Business & Economics
ISBN : 9781513574356

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Monetary Policy, Inflation, and Distributional Impact: South Africa’s Case by Mr. Ken Miyajima Pdf

The South African Reserve Bank has continued to fulfill its constitutional mandate to protect the value of the local currency by keeping inflation low and steady. This paper provides evidence that monetary policy tightening aimed at maintaining low and stable inflation could at the same time reduce consumption inequality over a 12–18 month horizon, commonly understood as the transmission lag of monetary policy action to the real economy, and similar to the distance between survey waves used in the analysis. In response to “exogenous” monetary policy tightening, the real consumption of individuals at lower ends of the consumption distribution declines relatively modestly, or even increases. With greater reliance on government transfers, thus smaller reliance on labor income, and relatively larger food consumption, these individuals appear to benefit mainly from lower inflation. By contrast, the real consumption of individuals at higher ends of the consumption distribution is more likely to decline due to lower labor income, weaker asset price performance, and higher debt service cost.

Author : Mr.Olivier Coibion,Mr.Yuriy Gorodnichenko,Mr.Gee Hee Hong
Publisher : International Monetary Fund
Page : 75 pages
File Size : 55,7 Mb
Release : 2012-08-01
Category : Business & Economics
ISBN : 9781475505573

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The Cyclicality of Sales, Regular and Effective Prices by Mr.Olivier Coibion,Mr.Yuriy Gorodnichenko,Mr.Gee Hee Hong Pdf

We study the cyclical properties of sales, regular price changes and average prices paid by consumers ("effective" prices) in a dataset containing prices and quantities sold for numerous retailers across a variety of U.S. metropolitan areas. Both the frequency and size of sales fall when local unemployment rates rise and yet the inflation rate for effective prices paid by consumers declines significantly with higher unemployment. This discrepancy can be reconciled by consumers reallocating their expenditures across retailers, a feature of the data which we document and quantify. We propose a simple model with household shopping effort and store-switching consistent with these stylized facts and document its implications for business cycles and policymakers.

Author : Stefan Hohberger,Romanos Priftis,Lukas Vogel
Publisher : Unknown
Page : 32 pages
File Size : 40,8 Mb
Release : 2018
Category : Econometric models
ISBN : 9279934066

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The Distributional Effects of Conventional Monetary Policy and Quantitative Easing by Stefan Hohberger,Romanos Priftis,Lukas Vogel Pdf

This paper compares the distributional effects of conventional monetary policy and quantitative easing (QE) within an estimated open-economy DSGE model of the euro area. The model includes two groups of households: (i) wealthier households, who own financial assets and are able to smooth consumption over time, and (ii) poorer households, who only receive labor and transfer income and live ‘hand to mouth’. We use the model to compare the impact of policy shocks on constructed measures of income and wealth inequality (net disposable income, net asset position, and relative per-capita income). Except for the short term, expansionary conventional policy and QE shocks tend to mitigate income and wealth inequality between the two population groups. In light of the coarse dichotomy of households that abstracts from richer income and wealth dynamics at the individual level, the analysis emphasizes the functional distribution of income.

Author : Robert L. Hetzel
Publisher : Cambridge University Press
Page : 7 pages
File Size : 51,7 Mb
Release : 2008-03-17
Category : Political Science
ISBN : 9781139470643

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The Monetary Policy of the Federal Reserve by Robert L. Hetzel Pdf

Details the evolution of the monetary standard from the start of the Federal Reserve through the end of the Greenspan era. The book places that evolution in the context of the intellectual and political environment of the time. By understanding the fitful process of replacing a gold standard with a paper money standard, the conduct of monetary policy becomes a series of experiments useful for understanding the fundamental issues concerning money and prices. How did the recurrent monetary instability of the 20th century relate to the economic instability and to the associated political and social turbulence? After the detour in policy represented by FOMC chairmen Arthur Burns and G. William Miller, Paul Volcker and Alan Greenspan established the monetary standard originally foreshadowed by William McChesney Martin, who became chairman in 1951. The Monetary Policy of the Federal Reserve explains in a straightforward way the emergence and nature of the modern, inflation-targeting central bank.

Author : Gabriela Inchauste,Nora Lustig
Publisher : World Bank Publications
Page : 318 pages
File Size : 50,6 Mb
Release : 2017-09-19
Category : Business & Economics
ISBN : 9781464810923

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The Distributional Impact of Taxes and Transfers by Gabriela Inchauste,Nora Lustig Pdf

The World Bank has partnered with the Commitment to Equity Institute at Tulane University to implement their diagnostic tool—the Commitment to Equity (CEQ) Assessment—designed to assess how taxation and public expenditures affect income inequality, poverty, and different economic groups. The approach relies on comprehensive fiscal incidence analysis, which measures the contribution of each individual intervention to poverty and inequality reduction as well as the combined impact of taxes and social spending. The CEQ Assessment provide an evidence base upon which alternative reform options can be analyzed. The use of a common methodology makes the results comparable across countries. This volume presents eight country studies that examine the distributional effects of individual programs and policy measures—and the net effect of each country’s mix of policies and programs. These case studies were produced in the context of Bank policy dialogue and have since been used to propose alternative reform options.