Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/208224
Authors: 
Lenza, Michele
Slacalek, Jirka
Year of Publication: 
2018
Series/Report no.: 
ECB Working Paper 2190
Abstract: 
This paper studies the effects of quantitative easing on income and wealth of individual euro area households. The aggregate effects of quantitative easing are estimated in a multi-country VAR model of the four largest euro area countries, in which key variables affecting household income and wealth are included, such as the unemployment rate, wages, interest rates, house prices and stock prices. The aggregate effects are distributed across the individual households by means of a reduced-form simulation on micro data from the Household Finance and Consumption Survey, capturing the income composition, the portfolio composition and the earnings heterogeneity channels of transmission. We find that the earnings heterogeneity channel plays a key role: quantitative easing compresses the income distribution since many households with lower incomes become employed. In contrast, monetary policy has only negligible effects on wealth inequality.
Subjects: 
Monetary Policy
Household Heterogeneity
Inequality
Income
Wealth
Quantitative Easing
Great Recession
JEL: 
D14
D31
E44
E52
E58
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3295-0
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.