6533b7d5fe1ef96bd126483e

RESEARCH PRODUCT

The effects of monetary policy on income and wealth inequality in the U.S. Exploring different channels

Antonio PeñalverAlberto Perez-bernabeuJuan-francisco Albert

subject

Economics and EconometricsTransmission channelFundamentos del Análisis EconómicoInequalitymedia_common.quotation_subject05 social sciencesMonetary policyIncome and wealth inequality0211 other engineering and technologies02 engineering and technologyMonetary economicsHigh-frequency identificationMonetary policyEconomic inequalityProxy SVAR0502 economics and businessEconomicsPortfolio021108 energy050207 economicsmedia_commonCommunication channelBVAR

description

We assess the effects of monetary policy shocks on income and wealth inequality through direct inequality measures and by analyzing several transmission channels explored in recent literature. Furthermore, we analyze two additional channels: the Housing and the Fiscal channels. The methodology adopted is a Bayesian proxy SVAR using a high-frequency identification based on the external instruments approach. Our own policy shocks are constructed for this purpose. The results show that an expansionary monetary policy shock does not have a significant effect on income inequality due to the existence of opposite channels, whereas it increases wealth inequality mainly through the portfolio channel. This research was supported by the FPU grant (FPU16/03957) from the Ministerio de Ciencia e Innovación/Universidades (Spain) to the first author of this research. This work is also partially funded by the Ministerio de Economia y Cometitividad (Spain) with the project TIN2016-80565-R : Design and development of high performance algorithms for finding the best econometric model and its application to health science problems.

yearjournalcountryeditionlanguage
2020-12-01
10.1016/j.strueco.2020.07.002http://hdl.handle.net/10045/112010