Effects of Unconventional Monetary Policy on Income and Wealth Distribution: Evidence from United States and Eurozone

  • Juan-Francisco Albert University of Valencia, Department of Applied Economics, Spain
  • Nerea Gómez-Fernández University of Valencia, Department of Applied Economics, Spain
  • Carlos Ochando University of Valencia, Department of Applied Economics, Spain

Abstract

As an answer to the “Great Recession” and Zero Lower Bound problem, main central banks had to use unconventional monetary policy (UMP). This research focuses on the distributive effects of these measures on household income and household wealth in the United States of America (USA) and the Eurozone. For this purpose, this paper presents four models that were constructed using the Structural Vector Autoregressive methodology (SVAR). The results suggest that the UMPs applied by the Federal Reserve (FED) in the USA could increase wealth and income inequality through the portfolio channel. However, the same results were not observed in the Eurozone.


Key words: United States of America, Eurozone, Income inequality, Wealth inequality, Unconventional monetary policy.
JEL: E52, E58, D63.


Uticaji nekonvencionalne monetarne politike na raspodelu dohotka i bogatstva: Dokazi iz Sjedinjenih Država i Evrozone


Kao odgovor na „Veliku recesiju“ i problem sa nultom donjom granicom, glavne centralne banke su morale koristiti nekonvencionalnu monetarnu politiku (UMP). Ovo istraživanje se fokusira na distributivne efekte ovih mera na prihod i bogatstvo domaćinstava u Sjedinjenim Američkim Državama (SAD) i evrozoni. U tu svrhu, ovaj rad predstavlja četiri modela koja su izgrađena pomoću strukturne vektorske autoregresivne metodologije (SVAR). Rezultati sugerišu da bi UMP-ovi koje je primenila Federalna banka (FED) u USA mogli povećati bogatstvo i nejednakost prihoda kroz portfolio kanal. Međutim, isti rezultati nisu primećeni u evrozoni.


Ključne reči: Sjedinjene Američke Države, evrozona, nejednakost u dohotku, nejednakost u bogatstvu, nekonvencionalna monetarna politika.


 

How to Cite
Albert J., Gómez-Fernández N., & Ochando C. (2019). Effects of Unconventional Monetary Policy on Income and Wealth Distribution: Evidence from United States and Eurozone. Panoeconomicus, 66(5), 535-558. doi:10.2298/PAN161208007M
Section
Original scientific paper