Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268913 
Year of Publication: 
2022
Series/Report no.: 
CEBI Working Paper Series No. 09/22
Publisher: 
University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI), Copenhagen
Abstract: 
We analyze the distributional effects of monetary policy on income, wealth and consumption. We use administrative household-level data covering the entire population in Denmark over the period 1987-2014 and exploit a long-standing currency peg as a source of exogenous variation in monetary policy. We consistently find that gains from softer monetary policy in terms of income, wealth and consumption are monotonically increasing in the ex-ante income level. The distributional effects reflect systematic differences in exposure to the various channels of monetary policy, especially non-labor channels (e.g. leverage and risky assets). Our estimates imply that softer monetary policy increases income inequality.
Subjects: 
Monetary policy
Inequality
Household heterogeneity
Risky assets
Leverage
JEL: 
E2
E4
E5
G1
G2
G5
Document Type: 
Working Paper

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