This paper reviews recent research on the relationship between central bank policies and inequality. A new paradigm which integrates sticky-prices, incomplete markets, and heterogeneity among households is emerging, which allows for the joint study of how inequality shapes macroeconomic aggregates and how macroeconomic shocks and policies affect inequality. The new paradigm features multiple distributional channels of monetary policy. Most empirical studies, however, analyze each potential channel of redistribution in isolation. Our review suggests that empirical research on the effects of conventional monetary policy on income and wealth inequality yields mixed findings, although there seems to be a consensus that higher inflation, at least above some threshold, increases inequality. In contrast to common wisdom, conclusions concerning the impact of unconventional monetary policies on inequality are also not clear cut. To better understand policy effects on inequality, future research should focus on the estimation of General Equilibrium models with heterogeneous agents.

Colciago, A., Samarina, A., & de Haan, J. (2019). CENTRAL BANK POLICIES AND INCOME AND WEALTH INEQUALITY: A SURVEY. JOURNAL OF ECONOMIC SURVEYS, 33(4), 1199-1231 [10.1111/joes.12314].

CENTRAL BANK POLICIES AND INCOME AND WEALTH INEQUALITY: A SURVEY

Colciago, A;
2019

Abstract

This paper reviews recent research on the relationship between central bank policies and inequality. A new paradigm which integrates sticky-prices, incomplete markets, and heterogeneity among households is emerging, which allows for the joint study of how inequality shapes macroeconomic aggregates and how macroeconomic shocks and policies affect inequality. The new paradigm features multiple distributional channels of monetary policy. Most empirical studies, however, analyze each potential channel of redistribution in isolation. Our review suggests that empirical research on the effects of conventional monetary policy on income and wealth inequality yields mixed findings, although there seems to be a consensus that higher inflation, at least above some threshold, increases inequality. In contrast to common wisdom, conclusions concerning the impact of unconventional monetary policies on inequality are also not clear cut. To better understand policy effects on inequality, future research should focus on the estimation of General Equilibrium models with heterogeneous agents.
Articolo in rivista - Articolo scientifico
Income inequality; Macroprudential policy; Monetary policy; Wealth inequality;
Income inequality; Macroprudential policy; Monetary policy; Wealth inequality
English
1199
1231
33
Colciago, A., Samarina, A., & de Haan, J. (2019). CENTRAL BANK POLICIES AND INCOME AND WEALTH INEQUALITY: A SURVEY. JOURNAL OF ECONOMIC SURVEYS, 33(4), 1199-1231 [10.1111/joes.12314].
Colciago, A; Samarina, A; de Haan, J
File in questo prodotto:
File Dimensione Formato  
Colciago_et_al-2019-Journal_of_Economic_Surveys.pdf

Solo gestori archivio

Descrizione: Main Text
Tipologia di allegato: Publisher’s Version (Version of Record, VoR)
Dimensione 421.29 kB
Formato Adobe PDF
421.29 kB Adobe PDF   Visualizza/Apri   Richiedi una copia
joes.12314.pdf

Solo gestori archivio

Tipologia di allegato: Publisher’s Version (Version of Record, VoR)
Dimensione 405.91 kB
Formato Adobe PDF
405.91 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/257210
Citazioni
  • Scopus 51
  • ???jsp.display-item.citation.isi??? 47
Social impact