The purpose of this paper is to conduct a survey of the recent literature
that evaluates, in an empirical way, the distributional impacts of monetary
policy. In the first two sessions, we discuss, respectively, the
transmission channels of monetary policy to income distribution and the
empirical strategies used to measure it. The majority of surveyed papers
find that a contractionary monetary policy worsen the income distribution,
and that an expansionist policy tends to improve it. Moreover, several
papers found that the higher is the redistributive impact of fiscal policy,
the lower is the impact of monetary policy on inequality. Another outcome
with empirical support is the role of the labor share on total income: the
higher is this share, the higher is the impact of monetary policy on
inequality. The last point discussed is the asymmetric effects of
contractionary and expansionary monetary policy. There is evidence that
increases in interest rates have statistically significant effects on income
distribution, whereas the effects of reductions in interest rates are not
statistically different from zero. This empirical finding goes against the
conventional view that the distributional effects of interest rate changes
are temporary and likely to net out over the business cycle.
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