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Monetary Policy Impact on Income Inequality in the Russian Regions

Author

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  • Alyona Nelyubina

    (Bank of Russia; Lomonosov Moscow State University)

Abstract

This paper focuses on the impact of the monetary policy on income inequality in the Russian regions in the short term. The 2015-2020 quarterly panel data analysis detects a considerable negative correlation between the key rate changes and inequality. Tougher monetary stance in the current period results in reduced inequality one year after. The correlation is more evident in the regions with higher average per capita household incomes, which may indirectly testify to the effect of financial segmentation channel, according to which financial assets of usually wealthier households depreciate due to increased key rate. Such an impact becomes weaker through the income composition channel, with a higher key rate leading to decreased wages and increased inequality. Some cases also imply a Fisher channel, traditionally redistributing wealth from higher-income creditors to lower-income borrowers; however, its effect is less pronounced.

Suggested Citation

  • Alyona Nelyubina, 2022. "Monetary Policy Impact on Income Inequality in the Russian Regions," Russian Journal of Money and Finance, Bank of Russia, vol. 81(2), pages 3-19, June.
    • Handle: RePEc:bkr:journl:v:81:y:2022:i:2:p:3-19
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    References listed on IDEAS

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    Cited by:

    1. Valeria Zvereva, 2025. "Monetary Policy Transmission Mechanism: The Role of Household Heterogeneity and Spatial Effects," Russian Journal of Money and Finance, Bank of Russia, vol. 84(3), pages 3-27, September.
    2. Valeria Zvereva & Olga Demidova & Dmitry Korshunov & Alexander Myasnikov, 2024. "Impact of Intraregional Income Inequality on the Operation of the Bank of Russia's Monetary Policy Transmission Mechanism," Russian Journal of Money and Finance, Bank of Russia, vol. 83(1), pages 3-31, March.

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    More about this item

    Keywords

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    JEL classification:

    • 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
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

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