The impact of monetary and tax policy on income inequality in Japan

Arbeitspapier

This paper assesses the effects of the most recent monetary policy behavior of the Bank of Japan (BOJ) (in particular, zero interest rate policy and negative interest rate policy) and Japanese tax policy on income inequality in this country during the period of 2002Q1 to 2017Q3. The vector error correction model that develops in this research, shows that increase in money stock (m1) through quantitative easing (QE) and quantitative and qualitative easing (QQE) policies of the BOJ significantly increases the income inequality. On the contrary, Japanese tax policy was effective in reducing the income inequality. Variance decomposition results show after ten periods almost 87.15% of the forecast error variance of the inequality is accounted for by its own innovations and 3.76% of the forecast error variance can be explained by exogenous shocks to monetary policy shock - the money stock (M1). The short-term interest rate also accounts for the increase in inequality by 0.47%. On the other hand, the total tax and real gross domestic product contributed in reducing the inequality measure, respectively, by 6.65% and 1.96% after 10 periods.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ADBI Working Paper ; No. 837

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Monetary Policy ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
• Thema: income inequality ; monetary policy ; tax policy ; Japanese economy

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Taghizadeh-Hesary, Farhad ; Yoshino, Naoyuki ; Shimizu, Sayoko
• Ereignis: Veröffentlichung
• (wer): Asian Development Bank Institute (ADBI)
• (wo): Tokyo
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/190258
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ