Five Facts about the Distributional Income Effects of Monetary Policy Shocks
AbstractWe document five facts about the distributional income effects of monetary policy shocks using Swedish administrative individual-level data. (i) The effects of monetary policy shocks are U shaped over the income distribution—that is, expansionary shocks increase the incomes of high- and low-income individuals relative to middle-income individuals. (ii) The large effects in the bottom are accounted for by the labor-income response and (iii) those in the top by the capital-income response. (iv) The heterogeneity in the labor-income response is due to the earnings heterogeneity channel, whereas (v) that in the capital-income response is due to the income composition channel.
CitationAmberg, Niklas, Thomas Jansson, Mathias Klein, and Anna Rogantini Picco. 2022. "Five Facts about the Distributional Income Effects of Monetary Policy Shocks." American Economic Review: Insights, 4 (3): 289-304. DOI: 10.1257/aeri.20210262
- D31 Personal Income, Wealth, and Their Distributions
- E32 Business Fluctuations; Cycles
- E52 Monetary Policy
- J31 Wage Level and Structure; Wage Differentials