Distributional impacts of low for long interest rates

This paper asks whether tepid inflation in Canada since the financial crisis can in part be explained by the effects of monetary policy on inequality. Using different structural vector autoregression models we show that expansionary monetary policy post-crisis has offset otherwise falling inequality...

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Autores principales: Kronick, Jeremy M., Villarreal, Francisco G.
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Lenguaje:English
Publicado: CEPAL 2019
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Acceso en línea:http://hdl.handle.net/11362/44666
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spelling oai-11362-446662019-08-09T17:36:53Z Distributional impacts of low for long interest rates Kronick, Jeremy M. Villarreal, Francisco G. MACROECONOMIA INFLACION DISTRIBUCION DEL INGRESO POLITICA MONETARIA CONSUMO TASAS DE INTERES MACROECONOMICS INFLATION INCOME DISTRIBUTION MONETARY POLICY CONSUMPTION INTEREST RATES This paper asks whether tepid inflation in Canada since the financial crisis can in part be explained by the effects of monetary policy on inequality. Using different structural vector autoregression models we show that expansionary monetary policy post-crisis has offset otherwise falling inequality through the shifting of resources away from lower-income individuals, which in general have higher marginal propensities to consume. As a result, aggregate demand has not risen as much as it otherwise would have, leading to a more muted inflationary response. Our results suggest that failure to account for the heterogeneity of consumption responses across the income distribution could lead to an overestimation of the magnitude of inflation’s response to a monetary policy shock. Abstract .-- Introduction .-- I. Stylized facts. A. Tepid inflation. B. Changes to the income distribution. C. Consumption baskets across the income distribution .-- II. SVAR Models and results. A. Basic SVAR. B. Detailed SVAR .-- III. Conclusion. 2019-07-18T16:36:21Z 2019-07-18T16:36:21Z 2019-07-18 Texto Documento Completo http://hdl.handle.net/11362/44666 LC/MEX/TS.2019/10 LC/TS.2019/46 en Serie Estudios y Perspectivas (México, DF) 180 .pdf application/pdf AMERICA LATINA Y EL CARIBE LATIN AMERICA AND THE CARIBBEAN CEPAL
institution Cepal
collection Cepal
language English
topic MACROECONOMIA
INFLACION
DISTRIBUCION DEL INGRESO
POLITICA MONETARIA
CONSUMO
TASAS DE INTERES
MACROECONOMICS
INFLATION
INCOME DISTRIBUTION
MONETARY POLICY
CONSUMPTION
INTEREST RATES
spellingShingle MACROECONOMIA
INFLACION
DISTRIBUCION DEL INGRESO
POLITICA MONETARIA
CONSUMO
TASAS DE INTERES
MACROECONOMICS
INFLATION
INCOME DISTRIBUTION
MONETARY POLICY
CONSUMPTION
INTEREST RATES
Kronick, Jeremy M.
Villarreal, Francisco G.
Distributional impacts of low for long interest rates
description This paper asks whether tepid inflation in Canada since the financial crisis can in part be explained by the effects of monetary policy on inequality. Using different structural vector autoregression models we show that expansionary monetary policy post-crisis has offset otherwise falling inequality through the shifting of resources away from lower-income individuals, which in general have higher marginal propensities to consume. As a result, aggregate demand has not risen as much as it otherwise would have, leading to a more muted inflationary response. Our results suggest that failure to account for the heterogeneity of consumption responses across the income distribution could lead to an overestimation of the magnitude of inflation’s response to a monetary policy shock.
format Texto
author Kronick, Jeremy M.
Villarreal, Francisco G.
author_facet Kronick, Jeremy M.
Villarreal, Francisco G.
author_sort Kronick, Jeremy M.
title Distributional impacts of low for long interest rates
title_short Distributional impacts of low for long interest rates
title_full Distributional impacts of low for long interest rates
title_fullStr Distributional impacts of low for long interest rates
title_full_unstemmed Distributional impacts of low for long interest rates
title_sort distributional impacts of low for long interest rates
publisher CEPAL
publishDate 2019
url http://hdl.handle.net/11362/44666
work_keys_str_mv AT kronickjeremym distributionalimpactsoflowforlonginterestrates
AT villarrealfranciscog distributionalimpactsoflowforlonginterestrates
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