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Monetary policy and the redistribution of net worth in the U.S

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  • Juan-Francisco Albert
  • Nerea Gómez-Fernández

Abstract

This paper aims to study the distributive effects of monetary policy on wealth inequality in the US. Combining macro and micro data, we find that wealth inequality increases after an expansionary monetary policy shock, especially in the long run. Specifically, we find that an expansionary monetary policy shock substantially increases the net worth of the richest and the poorest households, while the middle class tends to benefit the least. A remarkable policy implication of our work is that, considering the post-pandemic situation, forthcoming monetary policy should be designed to avoid these unwanted effects on wealth inequality.

Suggested Citation

  • Juan-Francisco Albert & Nerea Gómez-Fernández, 2022. "Monetary policy and the redistribution of net worth in the U.S," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 25(4), pages 420-434, October.
    • Handle: RePEc:taf:jpolrf:v:25:y:2022:i:4:p:420-434
    DOI: 10.1080/17487870.2021.1895778
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    Cited by:

    1. Thomas Gries & Lukas Wiechers & Sebastian José Luna-Victoria, 2023. "Unconventional monetary policy and wealth inequality: evidence from the US," Economics Bulletin, AccessEcon, vol. 43(4), pages 1865-1874.
    2. Albert, Juan-Francisco & Gómez-Fernández, Nerea, 2024. "The impact of monetary policy shocks on net worth and consumption across races in the United States," Economic Systems, Elsevier, vol. 48(1).

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