Adam Smith Business School

Professor José-Luis Peydró, Imperial College London

'Monetary Policy and Inequality' (co-authored by A. L. Andersen, N. Johannsen & M. Jørgensen)
Thursday 24 March, 3pm - 4.30pm
Zoom online seminar

Register at business-events@glasgow.ac.uk

Abstract

We analyse 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 the 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-labour channels (e.g. leverage and assets). Our estimates imply that softer monetary policy increases income inequality by raising income shares at the top of the income distribution and reducing them at the bottom.

Biography

José-Luis Peydró is a Professor of Finance at Imperial College London and an ICREA Professor of Economics at UPF-CREI. He is a Research Fellow at CEMFI and CEPR. He is currently a consultant at the European Central Bank, European Investment Bank, European Securities and Markets Authority, Bank of Spain and Inter-American Development Bank. He is also a Research Professor at the Bundesbank.

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Further information: business-events@glasgow.ac.uk

First published: 18 March 2022