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Quantitative easing and median income: a state-level analysis

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  • Edmond Berisha
  • John Meszaros
  • Zaman Zamanian

Abstract

Due to the Great Recession, the Federal Reserve engaged in unconventional monetary policy (QE) to fight the effects of the economic downturn. Literature asserts that QE did have impacts on economic growth and helped alleviate the effects of the recession. Recently, critics have asserted that the benefits of QE may not have been equally distributed across households. In this paper, we build a state-level dataset to investigate the dynamics of QE measures and median income across the U.S states. The findings indicate that, for the period 2008 to 2014, there is statistical evidence that increases in the Federal Reserve’s balance sheet correspond with higher nominal median income. However, once we adjust for inflation, the results become statistically insignificant and the impact of QE on median income becomes almost zero.

Suggested Citation

  • Edmond Berisha & John Meszaros & Zaman Zamanian, 2019. "Quantitative easing and median income: a state-level analysis," Applied Economics, Taylor & Francis Journals, vol. 51(42), pages 4564-4575, September.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:42:p:4564-4575
    DOI: 10.1080/00036846.2018.1564118
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    Cited by:

    1. David Knezevic & Martin Nordström & Pär Österholm, 2021. "The relation between municipal and government bond yields in an era of unconventional monetary policy," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 50(1), February.

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