Monetary policy and inequality

Arbeitspapier

We analyze the distributional effects of monetary policy on income, wealth and consumption. We use administrative household-level data covering the entire population in Denmark over the period 1987-2014 and exploit a long-standing currency peg as a source of exogenous variation in monetary policy. We consistently find that gains from softer monetary policy in terms of income, wealth and consumption are monotonically increasing in the ex-ante income level. The distributional effects reflect systematic differences in exposure to the various channels of monetary policy, especially non-labor channels (e.g. leverage and risky assets). Our estimates imply that softer monetary policy increases income inequality.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CEBI Working Paper Series ; No. 09/22

Classification and Topics

• Classification: Wirtschaft
• Subject: Monetary policy ; Inequality ; Household heterogeneity ; Risky assets ; Leverage

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Andersen, Asger Lau ; Johannesen, Niels ; Jørgensen, Mia Herløv ; Peydró, José-Luis
• Event: Veröffentlichung
• (who): University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI)
• (where): Copenhagen
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/268913
• Last update: 10.03.2025, 11:42 AM CET