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Has monetary policy made you happier?

Author

Listed:
  • Bunn, Philip

    (Bank of England)

  • Haldane, Andrew

    (Bank of England)

  • Pugh, Alice

    (Bank of England)

Abstract

Concerns were raised about the distributional impact of the loosening in UK monetary policy following the financial crisis. We assess the impact of this loosening on well-being using household-level data and estimated utility functions. The welfare benefits are found to have been positive, in aggregate and across most of the household distribution, relative to what otherwise would have happened. They are significantly larger than when looking at financial factors alone due to the non-financial benefits of lower unemployment and financial distress. Most people were made better-off in welfare terms from the monetary loosening, rich and poor, although the young have benefited more than the old.

Suggested Citation

  • Bunn, Philip & Haldane, Andrew & Pugh, Alice, 2020. "Has monetary policy made you happier?," Bank of England working papers 880, Bank of England.
    • Handle: RePEc:boe:boeewp:0880
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    References listed on IDEAS

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    Cited by:

    1. Marcin Bielecki & Michał Brzoza-Brzezina & Marcin Kolasa, 2022. "Intergenerational Redistributive Effects of Monetary Policy [Price-Level Changes and the Redistribution of Nominal Wealth Across the Euro Area]," Journal of the European Economic Association, European Economic Association, vol. 20(2), pages 549-580.

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    More about this item

    Keywords

    Monetary policy; households; inequality; well-being;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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