Distributional Consequences of Conventional and Unconventional Monetary Policy PDF Download

Author: Marcin Bielecki
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Marcin Bielecki (ekonomia)
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Karen Davtyan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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"The general objective of the doctoral thesis is to evaluate the distributive effects of macroeconomic policies. In particular, the thesis assesses the distributional impact of fiscal policy, conventional and unconventional monetary policies. The distributive effect of fiscal policy is examined by analyzing the interrelations among economic growth, income inequality, and fiscal performance based on the evidence from the Anglo-Saxon countries. These interrelations are analyzed jointly in a system by examining also transmission channels among them. All the variables are regarded as endogenous within the framework of the structural vector autoregression methodology. This allows exploring dynamic interactions among the variables and feedback effects on each other through impulse response functions. In addition, the thesis provides new evidence on interrelations among economic growth, income inequality, and fiscal performance by employing the longest possible consistently measured data on income inequality on a country basis. The obtained results show that there are differences in the obtained results for the countries. Particularly, income inequality has negative effect on economic growth in the case of the UK while its effect is positive in the cases of the USA and Canada. The increase in inequality worsens fiscal performance for all the countries. Government spending reduces income inequality in the UK but it raises inequality in the USA and Canada. In addition, the results also indicate that tax revenues generally raise income inequality in all the considered countries. Thus, the measures of the fiscal policy channel are important tools to consider in the design of the policies to decrease inequality. The academic literature generally views fiscal policy as a measure to address growing income inequality, which is a widespread concern nowadays. Although the income distribution could also be affected by monetary policy, the distributive effects of monetary policy have not broadly been discussed in the literature. Taking this into account, the thesis contributes to the discussion in this research area by evaluating the effect of monetary policy on income inequality. The distributional effect of monetary policy is estimated in the case of the USA, where the dynamics in income inequality has mainly been driven by the variation in the upper end of distribution since early 1980's. Consequently, the thesis uses an inequality measure that represents the whole distribution of income. To identify a monetary policy shock, the thesis employs contemporaneous identification with ex-ante identified monetary policy shocks as well as log run identification. In particular, a cointegration relation has been determined among the considered variables and the vector error correction methodology has been applied for the identification of the monetary policy shock. The obtained results indicate that contractionary monetary policy decreases the overall income inequality in the country. These results could have important implications for the design of policies to reduce income inequality by giving more weight to monetary policy. In the wake of the global financial crisis, central banks have generally begun to implement unconventional monetary policy together with conventional policy measures. There are already numerous studies on the impact of unconventional monetary policy measures on financial market as well as on their macroeconomic effect. However, the distributive effect of unconventional monetary policy has not essentially been examined yet. The thesis fills this gap by evaluating the distributive impact of unconventional monetary policy in comparison with the distributional effect of conventional monetary policy. The distributional effects of conventional and unconventional monetary policies are evaluated for the USA. The distributive impact of conventional monetary policy is explored through contractionary policy shocks. At the same time, the distributional effect of unconventional monetary policy is studied via expansionary policy shocks. The obtained results indicate that conventional monetary policy reduces income inequality while unconventional monetary policy raises it. In particular, the distributive impact of conventional monetary policy is stronger. The results also show that the both conventional and unconventional monetary policies significantly affect the upper part of income distribution. While conventional monetary policy does not significantly affect the lower part of income distribution, unconventional monetary policy has still a significant impact on it. In addition, the implemented variance decomposition analysis assesses the relative importance of conventional and unconventional monetary policy shocks in the variation of Gini index of income inequality. The obtained results indicate that the unconventional monetary policy shock explains the higher share of the variation in Gini index than the conventional monetary policy shock."--TDX.

Author: Ulrich Bindseil
Publisher: Springer Nature
ISBN: 3030708845
Category : Business & Economics
Languages : en
Pages : 128

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This open access book gives a concise introduction to the practical implementation of monetary policy by modern central banks. It describes the conventional instruments used in advanced economies and the unconventional instruments that have been widely adopted since the financial crisis of 2007–2008. Illuminating the role of central banks in ensuring financial stability and as last resort lenders, it also offers an overview of the international monetary framework. A flow-of-funds framework is used throughout to capture this essential dimension in a consistent and unifying manner, providing a unique and accessible resource on central banking and monetary policy, and its integration with financial stability. Addressed to professionals as well as bachelors and masters students of economics, this book is suitable for a course on economic policy. Useful prerequisites include at least a general idea of the economic institutions of an economy, and knowledge of macroeconomics and monetary economics, but readers need not be familiar with any specific macroeconomic models.

Author: Nora Ampudia Márquez
Publisher:
ISBN:
Category :
Languages : en
Pages : 20

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Monetary policy have a decisive bearing on the concentration of income and wealth, but the policy makers prefer to avoid the subject and even today, there are few studies that address it. This document aims to establish the mechanisms through which monetary policy affects the concentration of income and wealth; transmission channels are established and existing errors in understanding inflation and income distribution are highlighted. It also states that the effects of monetary policy are not homogeneous, since they depend on the type of policy applied: conventional or unconventional, and shows, that the same policy, can have different effects depending on the composition of the balance of economic agents, their access to financial services, the type of assets held and specificity of the function of wealth. Finally, it states that the effects vary between developed and developing economies, and even within the same country.

Author: Margherita Bottero
Publisher: International Monetary Fund
ISBN: 1498300855
Category : Business & Economics
Languages : en
Pages : 59

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We study negative interest rate policy (NIRP) exploiting ECB's NIRP introduction and administrative data from Italy, severely hit by the Eurozone crisis. NIRP has expansionary effects on credit supply-- -and hence the real economy---through a portfolio rebalancing channel. NIRP affects banks with higher ex-ante net short-term interbank positions or, more broadly, more liquid balance-sheets, not with higher retail deposits. NIRP-affected banks rebalance their portfolios from liquid assets to credit—especially to riskier and smaller firms—and cut loan rates, inducing sizable real effects. By shifting the entire yield curve downwards, NIRP differs from rate cuts just above the ZLB.

Author: Marc-Antoine Ramelet
Publisher:
ISBN:
Category :
Languages : en
Pages :

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This dissertation investigates the transmission and effects of monetary policy. The conduct of monetary policy is often categorized into conventional and unconventional measures. The first and second chapters assess the effectiveness and distributional consequences of an extensively-used unconventional measure, namely asset purchase programmes. By contrast, the third chapter documents the transmission of conventional monetary policy to heterogeneous households. The first chapter analyzes the transmission of central bank asset purchase programmes (so-called quantitative easing measures, QE). To do so, I embed a corporate credit market imperfection in a New Keynesian model. The transmission is different than that of conventional policy: it operates via investment instead of private consumption. Importantly, QE is equally effective at the zero lower bound. My setting hence provides support to the usefulness of QE as a policy instrument when conventional measures become impotent. Estimating the model with US data, I show that the QE measures carried out in the US had large and persistent accommodating aggregate effects. The second chapter assesses some of the distributional consequences of central bank asset purchases. To this end, I nest the above credit friction in a model which contains rich household heterogeneity. While central bank purchases overall improve labor market conditions, the corresponding welfare gains vary considerably at the individual level. Younger households benefit the most from improved employment prospects. Because the gains are mostly driven by improved employment prospects, both the employed and the unemployed experience a similar increase in welfare. The gains obtained by older households instead rely on accumulated wealth and are therefore more sensitive to the ex-post employment path. In particular, households who face unemployment spells closer to retirement benefit the least. The third chapter p.

Author: Mr.Olivier Coibion
Publisher: International Monetary Fund
ISBN: 1475505493
Category : Business & Economics
Languages : en
Pages : 57

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We study the effects and historical contribution of monetary policy shocks to consumption and income inequality in the United States since 1980. Contractionary monetary policy actions systematically increase inequality in labor earnings, total income, consumption and total expenditures. Furthermore, monetary shocks can account for a significant component of the historical cyclical variation in income and consumption inequality. Using detailed micro-level data on income and consumption, we document the different channels via which monetary policy shocks affect inequality, as well as how these channels depend on the nature of the change in monetary policy.

Author: Stefan Hohberger
Publisher:
ISBN: 9789279934063
Category : Econometric models
Languages : en
Pages : 32

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This paper compares the distributional effects of conventional monetary policy and quantitative easing (QE) within an estimated open-economy DSGE model of the euro area. The model includes two groups of households: (i) wealthier households, who own financial assets and are able to smooth consumption over time, and (ii) poorer households, who only receive labor and transfer income and live ‘hand to mouth’. We use the model to compare the impact of policy shocks on constructed measures of income and wealth inequality (net disposable income, net asset position, and relative per-capita income). Except for the short term, expansionary conventional policy and QE shocks tend to mitigate income and wealth inequality between the two population groups. In light of the coarse dichotomy of households that abstracts from richer income and wealth dynamics at the individual level, the analysis emphasizes the functional distribution of income.

Author: A. B. Atkinson
Publisher: OUP Oxford
ISBN: 0191500887
Category : Business & Economics
Languages : en
Pages : 984

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A rapidly growing area of economic research investigates the top of the income distribution using data from income tax records. This volume brings together studies of top incomes for twelve countries from around the world, including China, India, Japan, Argentina and Indonesia. Together with the first volume, published in 2007, the studies cover twenty two countries. They have a long time span, the earliest data relating to 1875 (for Norway), allowing recent developments to be placed in historical perspective. The volume describes in detail the source data and the methods employed. It will be an invaluable reference source for researchers in the field. Individual country chapters deal with the specific nature of the data for each of the countries, and describe the long-term evolution of top income shares. In the countries as a whole, dramatic changes have taken place at the top of the income distribution. Over the first part of the century, top income shares fell markedly. This largely took the form of a reduction in capital incomes. The different authors examine the impact of the First and Second World Wars, contrasting countries that were and were not engaged. They consider the impact of depressions and banking crises, and pay particular attention to the impact of progressive taxation. In the last 30 years, the shares of top incomes have increased markedly in the US and other Anglo-Saxon countries, reflecting the increased dispersion of earnings. The volume includes statistics on the much-discussed top pay and bonuses, providing a global perspective that discusses important differences between countries such as the lesser increase in Continental Europe. This book, together with volume 1, documents this interesting development and explores the underlying causes. The findings are brought together in a final summary chapter by Atkinson, Piketty and Saez.