Part of The Elgar Series on Central Banking and Monetary Policy, this book explores the relationship between central banking, monetary policy and income distribution. The usual central bank mandate – that of exclusively fighting inflation – is being increasingly questioned by policymakers and academics. Many countries are finding that there is a need for broader mandates that will have an impact on economic activity, unemployment and other economic issues.
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.
Part of The Elgar Series on Central Banking and Monetary Policy, this book explores challenges surrounding central banking today. It goes beyond the immediate concerns with monetary policy and focuses instead on the concept of central banking more generally.
Central Banking, Monetary Policy and Gender uniquely explores the ways in which monetary policies, changes in interest rates and unconventional monetary strategies such as quantitative easing affect women. This groundbreaking book analyses the inner organisation of central banks, considering for the first time how banking transmission mechanisms operate in relation to gender, investigating issues of power, income, wealth inequality and labour market dynamics.
We study the effects and historical contribution of monetary policy shocks to consumption and income inequality in the United States since 1980. Contractionary monetary policy actions systematically increase inequality in labor earnings, total income, consumption and total expenditures. Furthermore, monetary shocks can account for a significant component of the historical cyclical variation in income and consumption inequality. Using detailed micro-level data on income and consumption, we document the different channels via which monetary policy shocks affect inequality, as well as how these channels depend on the nature of the change in monetary policy.
Part of The Elgar Series on Central Banking and Monetary Policy, this book explores the relationship between central banking, monetary policy and the economy at large. It focuses on the specific relationship between central banking, monetary policy and social responsibility as central banks wake up to new realities
Central banks are among the most powerful government economic institutions in the world. This volume explores the economic and political contours of the struggle for influence over the policies of central banks such as the Federal Reserve, and the implications of this struggle for economic performance and the distribution of wealth and power in society.
Part of The Elgar Series on Central Banking and Monetary Policy, this book explores the relationship between central banking, monetary policy and the economy at large, focusing on the specific relationship between central banking, monetary policy and the future of money.
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
This paper takes stock of the literature 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 to jointly study how inequality shapes macroeconomic aggregates and how macroeconomic shocks and policies affect inequality. While the new paradigm features multiple distributional channels of monetary policy, most empirical analyses analyse each potential channel of redistribution in isolation. Our review suggests that empirical research on the effect of conventional monetary policy on income and wealth inequality yields very mixed findings, although there seems to be a consensus that higher inflation, at least above some threshold, increases inequality. In contrast to common wisdom, the conclusions concerning the impact of unconventional monetary policies on income inequality are also not clear cut. This is so since these policies may reduce income inequality by stimulating economic activity, but may also increase inequality by boosting asset prices. Similarly, results concerning the impact of unconventional monetary policies on wealth inequality are rather mixed. The scant literature on the impact of macro-prudential policies on inequality finds evidence for redistributive effects, but in view of its limitations it may be too early to come to conclusions.
