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Title:Who pays for disinflation? Disinflationary monetary policy and the distribution of income PDF Logo
Authors:Thorbecke, Willem
Issue Date:1997
Series/Report no.:Public policy brief // Jerome Levy Economics Institute of Bard College 38
Abstract:Using theoretical predictions, econometric results, and the example of the Volcker disinflation, Willem Thorbecke establishes that through disinflation's burden on the durable goods and construction industries, small firms, and low-wage workers and its benefits to bond market investors, it effects a redistribution of wealth from the poor to the rich. Because of this distributional consequence, he argues, engineering a disinflationary recession now to wring more inflation out of the economy would be inappropriate. On the contrary, with inflation as low as it is and with upward pressure on wages that could trigger a rise in inflation also low, now is the time for the Federal Reserve to let the economy grow - to seek policies that promote distributive justice and that help those individuals most at risk for shrinking income.
ISBN:0941276384
Document Type:Research Report
Appears in Collections:Public Policy Briefs, Levy Economics Institute of Bard College

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