A widely heard criticism of the Federal Reserve’s purchases of trillions of dollars in bonds, or quantitative easing, is that the Fed increased inequality by pushing up prices of stocks, bonds, and other assets already in the hands of the wealthy. Did it? What role does monetary policy play in influencing the distribution of income and wealth? Would alternative policies have had different distributional effects?
On June 1, the Hutchins Center on Fiscal and Monetary Policy presented three new papers that explore these questions. Josh Bivens of the Economic Policy Institute looked at the channels through which conventional and unconventional monetary policies influence inequality. Matthias Doepke and Veronika Selezneva of Northwestern analyzed the impact of monetary policy on the distribution of wealth across households. Finally, Martin Beraja, Erik Hurst and Joe Vavra of the University of Chicago, and Andreas Fuster of the New York Federal Reserve examined whether regional differences should figure into monetary policy decisions that may affect inequality.
Responding to the papers and discussion was Brookings Robert S. Kerr Senior Fellow Donald Kohn, Kevin Warsh of the Hoover Institution, McKinsey’s Susan Lund, Mark Zandi of Moody’s Analytics, and Jean Boivin of BlackRock.