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Distributional Effects of Monetary Policy
Author:
Valentina Bonifacio
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Mr. Luis Brandao Marquesnull

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Mrs. Nina T Budina
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Mr. Balazs Csonto
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Chiara Fratto
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Philipp Englernull

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Davide Furcerinull

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Ms. Deniz O Igan
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https://orcid.org/0000-0002-9501-1807
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Rui Mano
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Mr. Machiko Narita
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Murad Omoev
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Gurnain Kaur Pasrichanull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 201
Language:
English
Publication Date:
30 Jul 2021
DOI:
https://doi.org/10.5089/9781513588858.001
ISBN:
9781513588858
ISSN:
1018-5941
Pages:
47
Keywords:
asset price channel; easing affect income; A. central bank mandate; wealth channel; A. savings-redistribution channel; Income inequality; Income distribution; Income; Wages; Consumption; Global; Caribbean
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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As central banks across the globe have responded to the COVID-19 shock by rounds of extensive monetary loosening, concerns about their inequality impact have grown. But rising inequality has multiple causes and its relationship with monetary policy is complex. This paper highlights the channels through which monetary policy easing affect income and wealth distribution, and presents some quantitative findings about their importance. Key takeaways are: (i) central banks should remain focused on macro stability while continuing to improve public communications about distributional effects of monetary policy, and (ii) supportive fiscal policies and structural reforms can improve macroeconomic and distributional outcomes.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2021: Issue 201