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Shocking aspects of monetary policy on income inequality in the euro area

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  • Jérôme Creel

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Mehdi El Herradi

    (UBM - Université Bordeaux Montaigne)

Abstract

This paper examines the distributional effects of monetary policy, either standard, nonstandard or both, on income inequality in 10 EA countries over the period 2000-2015. We use three different indicators of income inequality in a Panel VAR setting in order to estimate IRFs of inequality to a monetary policy shock. Results suggest that: (i) the distributional effects of ECB's monetary policy have been modest and (ii) mainly driven in times of conventional monetary policy measures, especially in peripheral countries, while, overall, (iii) standard and non-standard monetary policies do not significantly differ in terms of impact on income inequality.terms of impact on income inequality.

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  • Jérôme Creel & Mehdi El Herradi, 2019. "Shocking aspects of monetary policy on income inequality in the euro area," Working Papers hal-03403233, HAL.
    • Handle: RePEc:hal:wpaper:hal-03403233
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03403233
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    Cited by:

    1. Christophe Blot & Jérôme Creel & Emmanuelle Faure & Paul Hubert, 2020. "Setting New Priorities for the ECB's Mandate," Post-Print hal-03403024, HAL.
    2. repec:hal:spmain:info:hdl:2441/1f03f28hhu85b9bn1bp8i7g8ie is not listed on IDEAS
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    More about this item

    Keywords

    Euro area; Monetary policy; Income distribution; Panel Var;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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