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Using the Classical Equation of Exchange and Cantillon Effects to Help Describe the Increasing Inequality Created by an Increasingly Active Central Bank Monetary Policy

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  • Weber, Cameron

Abstract

To begin we need to define categories as to what is “inequality” and as related to monetary policy. For our purposes we will define the “poor” as those with less disposable income and the “rich” as those with more disposable income. We can realize that the poor spend more of their income on the means of existence in the product markets, whereas the rich have more disposable income to invest in the asset markets. Any (monetary) policy which harms the poor and helps the rich then can be identified as regressive policy creating inequality.

Suggested Citation

  • Weber, Cameron, 2013. "Using the Classical Equation of Exchange and Cantillon Effects to Help Describe the Increasing Inequality Created by an Increasingly Active Central Bank Monetary Policy," MPRA Paper 116787, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116787
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    More about this item

    Keywords

    Cantillon Effects; Monetary Policy; Inequality; Central Banks; Monetization; Financialization; Political Economy;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D3 - Microeconomics - - Distribution
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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