scholarly journals How Does Monetary Policy Affect Income Inequality? Evidence from Europe

2021 ◽  
Vol 24 (1) ◽  
pp. 95-112
Author(s):  
Vivien Czeczeli
Keyword(s):  
Monetary Policy ◽  
Side Effects ◽  
Interest Rates ◽  
Gdp Per Capita ◽  
Positive Effects ◽  
Panel Ardl ◽  
Nominal Interest Rates ◽  
Per Capita ◽  
Effect Of Monetary Policy

The issue of inequalities has become increasingly important in recent decades. Although distributional effects, such as  inequalities, are commonly associated with globalisation  and fiscal policy processes, many of the side effects of the  exceptionally loose monetary policy of the last decade also  affect the issue. After identifying the mechanisms and  channels linking the field of monetary policy and inequality,  the research focuses on empirical analyses. The  research is based on a panel ARDL test focusing on the 19  Euro area countries and Denmark, Sweden and Switzerland,  where negative nominal interest rates have  been applied. The research includes the period of 2008–2018. The aim of the paper is to assess how certain  monetary policy indicators affect inequality. The main  conclusion is consistent with the existing literature: the  effect of monetary policy to inequalities is modest, however  not negligible. The effect of inflation seems to be  weak; however, the rise in unemployment rate and long  term interest rates negatively affect inequalities. The  positive effects of the rising GDP per capita are also proven  by the analysis.

READING KEYNES AT THE ZERO LOWER BOUND: THE GREAT DEPRESSION, THE LIQUIDITY TRAP, AND UNCONVENTIONAL POLICY

2018 ◽  
Vol 40 (3) ◽  
pp. 301-334 ◽  
Author(s):  
Richard Sutch
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
Interest Rates ◽  
Great Depression ◽  
Zero Lower Bound ◽  
Liquidity Trap ◽  
The Great Depression ◽  
Nominal Interest Rates

John Maynard Keynes’s analysis of the Great Depression has strong parallels to recent theorizing about the post-2008 Great Recession. There are also remarkable similarities between the two historical episodes: the collapse of demand for new fixed investment, the role of the zero lower bound liquidity trap in hampering conventional monetary policy, the multi-year period of near-zero short-term rates, and the protracted period of subnormal prosperity. A major difference between then and now is that monetary authorities in the recent situation actively pursued an unconventional policy with massive purchases of long-term securities. Keynes couldn’t convince authorities of his era to pursue such a plan, but it was precisely the monetary policy he advocated for a depressed economy stuck at the zero lower bound of nominal interest rates.

scholarly journals The Costs of Macroprudential Deleveraging in a Liquidity Trap

2020 ◽  
Vol 20 (89) ◽  
Author(s):  
Jiaqian Chen ◽  
Daria Finocchiaro ◽  
Jesper Lindé ◽  
Karl Walentin
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
Interest Rates ◽  
Transaction Costs ◽  
New Keynesian ◽  
Short Term ◽  
Liquidity Trap ◽  
Nominal Interest Rates ◽  
Model Features

We examine the effects of various borrower-based macroprudential tools in a New Keynesian environment where both real and nominal interest rates are low. Our model features long-term debt, housing transaction costs and a zero-lower bound constraint on policy rates. We find that the long-term costs, in terms of forgone consumption, of all the macroprudential tools we consider are moderate. Even so, the short-term costs differ dramatically between alternative tools. Specifically, a loan-to-value tightening is more than twice as contractionary compared to loan-to-income tightening when debt is high and monetary policy cannot accommodate.

The Reproduction Vector of the Russian Economy: 1999-2007

2008 ◽  
pp. 94-109 ◽  
Author(s):  
D. Sorokin
Keyword(s):  
Economic Policy ◽  
Human Capital ◽  
Growth Rates ◽  
Developed Countries ◽  
Gdp Per Capita ◽  
Real Sector ◽  
Russian Economy ◽  
Per Capita ◽  
The Developed Countries

The problem of the Russian economy’s growth rates is considered in the article in the context of Russia’s backwardness regarding GDP per capita in comparison with the developed countries. The author stresses the urgency of modernization of the real sector of the economy and the recovery of the country’s human capital. For reaching these goals short- or mid-term programs are not sufficient. Economic policy needs a long-term (15-20 years) strategy, otherwise Russia will be condemned to economic inertia and multiplying structural disproportions.

scholarly journals Globalization and educational inequality during the 18th to 20th centuries: Latin America in global comparison

2010 ◽  
Vol 28 (2) ◽  
pp. 279-305 ◽  
Author(s):  
Joerg Baten ◽  
Christina Mumme
Keyword(s):  
Developing Countries ◽  
Latin America ◽  
Strong Evidence ◽  
Educational Inequality ◽  
Gdp Per Capita ◽  
Positive Effects ◽  
Global Comparison ◽  
Per Capita ◽  
The Rich

AbstractThis paper explores the inequality of numeracy and education by studying school years and numeracy of the rich and poor, as well as of tall and short individuals. To estimate numeracy, the age-heaping method is used for the 18th to early 20th centuries. Testing the hypothesis that globalization might have increased the inequality of education, we find evidence that 19th century globalization actually increased inequality in Latin America, but 20th century globalization had positive effects by reducing educational inequality in a broader sample of developing countries. Moreover, we find strong evidence for Kuznets’s inverted U hypothesis, that is, rising educational inequality with GDP per capita in the period until 1913 and the opposite after 1945.

scholarly journals Loose Monetary Policy and Corporate Investment of Manufacturing Firms in the Czech Republic

2018 ◽  
Vol 18 (4) ◽  
pp. 371-385
Author(s):  
Veronika Kajurová ◽  
Dagmar Linnertová
Keyword(s):  
Monetary Policy ◽  
Czech Republic ◽  
Interest Rates ◽  
Corporate Investment ◽  
Manufacturing Firms ◽  
Investment Activity ◽  
The Czech Republic ◽  
Low Interest Rates ◽  
Negative Effect

Abstract The aim of the paper is to evaluate the effects of loose monetary policy on corporate investment of manufacturing firms in the Czech Republic during the period between 2006 and 2015. The main focus of the paper is on the effect of low interest rates on investment activity of Czech firms; additionally, the effects of interactions between interest rate and other firm-specific variables are investigated. The results indicate that corporate investment is positively associated with firm size, investment opportunities, and long term debt. Also, a negative effect of the cash position is found. Further, the findings show that monetary policy is a significant determinant of firm investment activity: when the monetary policy is loose, investment is positively affected. Furthermore, differences in the determinants of investment between highly and low leveraged firms were revealed.

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