US monetary policy affects income inequality – Fed research
Surprise rate hikes affect lowest paid, authors find
US monetary policy affects income inequality, according to research from the Federal Reserve Board.
The study, published on March 31, says surprise rate hikes increase inequality, while surprise cuts reduce it.
The authors – Giovanni Favara, Francesca Loria, Gregory Marchal and Egon Zakrajšek – say the effects among the lowest paid drive the greater inequality precipitated by unexpected tightening. This effect, they say, is more pronounced when local labour market conditions are already weak.
The
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