Conventional and unconventional monetary policy vs. households income distribution: An empirical analysis for the Euro Area
By Chiara Guerello. Journal of International Money and Finance, 2017
122 citations recorded by the source corpus.
Abstract By recovering measures of income dispersion from the European Commission Consumer Survey, this analysis addresses whether conventional and unconventional monetary policies affect income inequalities in the Euro Area and the impact thereof on monetary transmission. First, in a VAR framework, the effects of both types of monetary policy on income distribution are evaluated. Second, the marginal effect of income dispersion on the consumption elasticity to monetary shocks is investigated using the same framework. The results suggest high cross-country heterogeneity in the impact of monetary policy and non-linearities associated with the redistributive strength of fiscal policy and the maturity of the household portfolio. Standard expansionary monetary measures typically have a small contractionary effect on income distribution. Mildly high-income dispersion is beneficial for the transmission of the monetary shocks to consumption because it overcomes the negative effect of consumption smoothing. However, for what concerns Q.E. measures, poorly redistributive fiscal policy and highly sensitive households’ portfolio might trigger these results.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/5282b6af11e8ed383f080a5f4b160b253be572f4
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Citations in the corpus
- How Does Monetary Policy Affect Income and Wealth Inequality? Evidence from Quantitative Easing in the Euro Area (2018, background): “A few papers follow the approach of Coibion et al. (2017) to assess the impact of standard policy on income inequality in other countries, notably Mumtaz and Theophilopoulou (2017) for the UK, Guerello (2018) for the euro area, Amberg et al. (2022) and Coglianese et al. (2021) for Sweden, Andersen e”
- CENTRAL BANK POLICIES AND INCOME AND WEALTH INEQUALITY: A SURVEY (2019, unknown): “For this purpose, studies estimate VAR models and construct impulse responses of inequality to a monetary policy shock (e.g., Saiki and Frost, 2014; Mumtaz and Theophilopoulou, 2015, 2017; Guerello, 2018) or use local projections to produce impulse responses (Coibion et al.”