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The Redistributive Effects of Monetary Policy Across Generations

Author

Listed:
  • Olga Bondarenko

    (National Bank of Ukraine)

Abstract

The paper revises the redistributive channels of monetary policy transmission and their impact on income and wealth distributions in a New-Keynesian Overlapping Generations (OLG) model. The model mimics total asset holdings and earnings processes of several types of households across generations, based on their attitude to saving and income group. In this environment, expansionary monetary shocks stimulate capital and debt accumulation to a larger extent for middle-aged individuals, contributing to intergenerational inequality. Heterogeneity of labor income augments this effect, benefitting richer and more productive workers.

Suggested Citation

  • Olga Bondarenko, 2018. "The Redistributive Effects of Monetary Policy Across Generations," Visnyk of the National Bank of Ukraine, National Bank of Ukraine, issue 244, pages 44-60.
    • Handle: RePEc:ukb:journl:y:2018:i:244:p:44-60
    DOI: 10.26531/vnbu2018.244.03
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    File URL: https://journal.bank.gov.ua/en/article/2018/244/03
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    References listed on IDEAS

    as
    1. Aedın Doris & Donal O’Neill & Olive Sweetman, 2011. "GMM estimation of the covariance structure of longitudinal data on earnings," Stata Journal, StataCorp LP, vol. 11(3), pages 439-459, September.
    2. Adrien Auclert, 2019. "Monetary Policy and the Redistribution Channel," American Economic Review, American Economic Association, vol. 109(6), pages 2333-2367, June.
    3. Erosa, Andres & Ventura, Gustavo, 2002. "On inflation as a regressive consumption tax," Journal of Monetary Economics, Elsevier, vol. 49(4), pages 761-795, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monetary policy; wealth redistribution; overlapping generations; heterogeneous agents;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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