Effects of Monetary Policy Shocks on Income Mobility in the Euro Area Countries

This paper examines the impacts of monetary policy shocks on income mobility in the Euro area, relying on earnings heterogeneity and income composition channels through which monetary policy affects income distribution. From a relative mobility perspective, upward and downward mobility are estimated over the period 2004-2014 for the EMU countries that originated the Economic and Monetary Union (EMU 1999). By using a vector error correction model (VECM) approach, overall we find that an expansionary monetary policy seems to encourage upward mobility and discourage downward mobility. By income groups, a loose monetary policy appears to reduce downward mobility for the upper class, while no empirical evidence can be provided to support that monetary policy shocks alter upward mobility for the lower class. Monetary policy shocks are especially favourable for the middle class as an expansionary monetary policy seems to boost upward mobility. A detailed analysis of the middle class shows that an expansionary monetary policy may propel the upward mobility and hinder the downward mobility of the lower-middle class, particularly favouring this income group. Key words: Monetary policy, Income mobility, Income distribution, Euro area. JEL: D63, E52. Efekti šokova monetarne politike na mobilnost dohodaka u zemljama Evrozone U radu se razmatra uticaj šokova monetarne politike na mobilnost prihoda u Evrozoni, oslanjajući se na heterogenost zarada i kanale kompenzacije prihoda kroz koje monetarna politika utiče na raspodelu prihoda. Iz perspektive relativne mobilnosti, procenjuje se mobilnost naviše i naniže u periodu 2004-2014. godine za zemlje EMU koje su nastale iz Ekonomske i monetarne unije (EMU 1999). Koristeći pristup vektorskog modela za korekciju grešaka (VECM), smatramo da ekspanzivna monetarna politika podstiče mobilnost naviše i obeshrabruje mobilnost naniže. Po dohodovnim grupama, čini se da labava monetarna politika smanjuje mobilnost naniže za višu klasu, dok se ne mogu pružiti empirijski dokazi koji bi poduprli šokove monetarne politike koji menjaju pokretljivost niže klase naviše. Šokovi monetarne politike su posebno povoljni za srednju klasu jer ekspanzivna monetarna politika podstiče mobilnost naviše. Detaljna analiza srednje klase pokazuje da ekspanzivna monetarna politika može pokrenuti pokretljivost naviše i ometati mobilnost niže-srednje klase naniže, što posebno ide u korist ove grupe. Ključne reči: Monetarna politika, mobilnost prihoda, raspodela prihoda, evro zona.