American Economic Review: Insights
ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)
Five Facts about the Distributional Income Effects of Monetary Policy Shocks
American Economic Review: Insights
vol. 4,
no. 3, September 2022
(pp. 289–304)
Abstract
We 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.Citation
Amberg, 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.20210262Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- E32 Business Fluctuations; Cycles
- E52 Monetary Policy
- J31 Wage Level and Structure; Wage Differentials