Monetary policy strongly influences income inequality – DNB paper
Central banks should not overlook income distribution effects, researchers say
Income distribution is ‘strongly’ affected by monetary policy, says a new paper from the central bank of the Netherlands (DNB).
In Monetary policy and the top one percent, authors Mehdi El Herradi and Aurélien Leroy investigate the historical relationship between monetary policy and income inequality. The paper studies 12 advanced economies since 1920 through combining both the World Inequality Database and the Jordà-Schularick-Taylor Macrohistory Database.
The paper found that “monetary
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