The Impact of Monetary Policy on Economic Inequality
by Patricia Dörr (Author)

About the Author
Patricia Dörr is currently a PhD student in economics at Trier University. Her focus lies on survey statistics and therein variance estimation.

About this book
The extensive monetary policy of central banks during the Great Recession has re-newed the interest in the relation between (possibly) non-neutral money and wealth and income inequality. In this work, a dynamic general equilibrium model approach is used to study the effects of an inflation rate change on inequality. These effects are found to be temporary and to work through two channels: First, at the consumer level, intertemporal substitution effects differ even under an identical policy rule of all agents due to individual skill and capital endowments. This implies a transitory effect of inflation rate changes on inequality. Second, an indirect effect results from different capital intensities in industrial branches and capital-labour substitution effects. This may be endorsed by varying individual skill levels. The theoretical model‘s implications are tested empirically in a time series analysis on US data.
Target Groups

• Scholars and students of economics with a focus on monetary policy, general equilibrium models and/or economic inequality
• Executives and consultants in the field of monetary policy
  

Table of contents
1 Introduction
2 Monetary Policy
3 General Equilibrium Models
    3.1 New Keynesian Models
    3.2 Classical Monetary Models
4 Introducing Agent Heterogeneity
5 Combining General Equilibrium Models and Agent Heterogeneity
    5.1 Model Set-up
    5.2 Equilibrium - The Balanced Growth Path
    5.3 Stability of the Income Distribution
    5.4 Monetary Policy and Inequality
        5.4.1 The Impact of a Nominal Interest Rate Change
        5.4.2 Stability of the Balanced Growth Path
    5.5 Labor Market Segmentation
6 Empirical Evidence
    6.1 Previous Findings
    6.2 Own Course of Action
        6.2.1 Methodology and Data
        6.2.2 Results
7 Conclusion
References
Appendices
    A Skill, Interest and Wage Change
    B Proof that ˙E/E = 0
    C Average Education Spending
    D Time Series Plots
    E Regression Results
    F Impulse Response Functions

Series: BestMasters
Lemgth: 84 pages
Publisher: Springer Gabler; 1st ed. 2018 edition (December 29, 2018)
Language: English
ISBN-10: 3658248343
ISBN-13: 978-3658248345