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The Effect of Monetary Policy Shocks on Inequality in the Eurozone

Author

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  • Makram El-Shagi

    (Center for Financial Development and Stability at Henan University, and School of Economics at Henan University, Kaifeng, Henan)

Abstract

In this paper, we assess the impact of monetary policy shocks on the income distribution in the Eurozone after the Global Financial Crisis, i.e., a time of unconventional monetary policy. Unlike previous papers that focus on the precrisis era, where monetary policy was primarily conducted through interest rates, expansionary policy typically increases inequality. This can be mitigated by highly developed financial markets and sound institutions that limit rent seeking.

Suggested Citation

  • Makram El-Shagi, 2024. "The Effect of Monetary Policy Shocks on Inequality in the Eurozone," CFDS Discussion Paper Series 2024/2, Center for Financial Development and Stability at Henan University, Kaifeng, Henan, China.
    • Handle: RePEc:fds:dpaper:202402
    as

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    File URL: http://cfds.henuecon.education/images/dpaper/WP_2_2024_Inequality_Eurozone.pdf
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    References listed on IDEAS

    as
    1. Altavilla, Carlo & Brugnolini, Luca & Gürkaynak, Refet S. & Motto, Roberto & Ragusa, Giuseppe, 2019. "Measuring euro area monetary policy," Journal of Monetary Economics, Elsevier, vol. 108(C), pages 162-179.
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    7. Lenza, Michele & Slacalek, Jiri, 2018. "How does monetary policy affect income and wealth inequality? Evidence from quantitative easing in the euro area," Working Paper Series 2190, European Central Bank.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    monetary policy; inequality; Eurozone;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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