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Monetary policy and economic inequality: a literature review

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  • Mikołaj Raczyński

    (Independent researcher)

Abstract

Recently, economic inequalities in many countries have markedly increased. We reviewed more than 40 recent research papers related to the impact of monetary policy on economic inequalities and analysed income and wealth inequalities along with conventional and unconventional monetary policies. The results of the literature review indicate that: (1) the employment response to a policy shift serves as the crucial aspect in determining distributional effects, (2) housing wealth acts as a mitigating factor when accounted for as net wealth, (3) the stock market exposure of households significantly affects the impact of monetary policy on inequality, (4) the impact on inequality of corporate bonds or equities purchases remains unexplored, (5) most of the studies based on survey data indicate lower inequality from policy easing, whereas most of the studies based on tax data or national accounts point in the opposite direction, and (6) estimated changes in inequality measures appear relatively modest.

Suggested Citation

  • Mikołaj Raczyński, 2022. "Monetary policy and economic inequality: a literature review," Bank i Kredyt, Narodowy Bank Polski, vol. 53(2), pages 231-278.
    • Handle: RePEc:nbp:nbpbik:v:53:y:2022:i:2:p:231-278
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    References listed on IDEAS

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    More about this item

    Keywords

    income inequality; wealth inequality; monetary policy; quantitative easing;
    All these keywords.

    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
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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