Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246158 
Year of Publication: 
2021
Series/Report no.: 
Staff Memo No. 4/2021
Publisher: 
Norges Bank, Oslo
Abstract: 
We quantify the short-term effects of both non-systematic and systematic monetary policy on the income and wealth distribution in Norway, and measure the relative importance of the various channels. An expansionary monetary policy shock is found to disproportionally benefit the young as well as households with middle to lower income and wealth, and it reduces inequality in disposable income and wealth. The key channel for disposable income is the savings redistribution channel, whereby households with high debt-to-income ratios gain relatively more from a lower interest rate. Because of the high home ownership rate in Norway, most households gain from higher house prices, but the middle and lower part of the distribution gain relatively more as they are more indebted. We also find that systematic monetary policy, aimed at stabilizing cyclical fluctuations in output and inflation, also tends to stabilize income and wealth inequality.
Subjects: 
Monetary policy
Inequality
Household heterogeneity
Income and wealth distribution
JEL: 
E2
E3
E5
G5
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-185-3
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Research Report
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