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Central Bank Quantitative Easing as an Emerging Political Liability

Author

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  • Xing, Victor

Abstract

Officials from major central banks have previously acknowledged QE programs’ distributional effects but expected aggregate economic benefits of these unconventional policies to outweigh their costs. Post-crisis asset price appreciation became well entrenched under the effect of QE, which out-paced median wage growth to unintentionally burden low-to-middle income households and individuals with limited asset ownership. Subsequently, rising inequality fueled discontent and contributed to the rise of anti-establishment political candidates Efforts by elected officials to ease the effects of policy-induced inequality would likely bolster support toward further redistribution policies such as “helicopter money” to threaten central bank monetary policy independence

Suggested Citation

  • Xing, Victor, 2017. "Central Bank Quantitative Easing as an Emerging Political Liability," MPRA Paper 81269, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:81269
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    File URL: https://mpra.ub.uni-muenchen.de/81269/1/MPRA_paper_81269.pdf
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    References listed on IDEAS

    as
    1. Xing, Victor, 2016. "Ultra-accommodative Monetary Policy and Unintentional Drags on Consumer Spending," MPRA Paper 77749, University Library of Munich, Germany.
    2. Jaison R. Abel & Richard Deitz, 2012. "Job polarization and rising inequality in the nation and the New York-northern New Jersey region," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 18(Oct).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Quantitative Easing; Distributional Effects; Helicopter Money; Debt Monetization;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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