Real-time inequalities and policies during the pandemic in the US

We investigate the effects of different policies implemented during the pandemic on real-time spatial inequalities in the US. We use a novel database built using anonymized data from the private sector, which enables us to compute daily measures of spending inequality at county level. Using a narrative approach combined with high-frequency data to identify the shocks, we evaluate the impact of monetary policy in a VAR framework. The main findings show that consumption spending inequality rose during the pandemic and that the Fed's policies did not mitigate this increase. Indeed, although these measures had a positive effect on spending for both richer and poorer counties, consumption was stimulated more for the former than for the latter ones. We distinguish two kinds of interventions: those regarding the federal funds rate, Repo agreements and QE programmes ('purely monetary') and those concerning subsidized lending facilities to support credit and avoid mass layoffs ('quasi-fiscal'). Our evidence suggests a greater contribution in the short run by the latter type to stimulating the consumption spending of higher-income counties.