Volume 17, Issue 1 (3-2022)                   J. Mon. Ec. 2022, 17(1): 1-24 | Back to browse issues page

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Hosseini S S, Jafari Samimi A, Tavakolian H, Ghobadi N. How Does Monetary Policy Affect Household Income Distribution?. J. Mon. Ec. 2022; 17 (1) :1-24
URL: http://jme.mbri.ac.ir/article-1-556-en.html
1- Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran
2- Faculty of Economics and Administrative Science, University of Mazandaran, Babolsar, Iran
3- Faculty of Economics, Allameh Tabataba'i University , Tehran, Iran
4- Ministry of Economics and Finance, Tehran, Iran
Abstract:   (427 Views)
Over the last decades the research on monetary policy has largely concentrated on the impact of monetary authorities’ decisions on inflation and the fine-tuning of the macroeconomic, so that distributional effects of monetary policy which are non-trivial has been ignored. A view that has become increasingly popular since the financial crisis 2008 is that expansionary monetary policy can exacerbate inequality. There is some recent empirical evidence that even in an era of low inflation rates; monetary policy shocks have persistent effects on the distribution of income and consumption across households. However, there has been little formal analysis of “winners" and “losers" from monetary policy. This paper investigates the distributional impact of monetary policy using the data of the Iranian economy based on the Dynamic Stochastic General Equilibrium Models (DSGE) approach. In this framework, the monetary shock via heterogeneous earnings channel effects two typical household’s income and consumption distribution. As the monetary shock have different effects on the consumption and income of each of typical households relying on model’s results, so the distributional effect of monetary policy is confirmed, the reason that monetary authorities must consider distributional effects of their policy besides other goals. The micro-based approach of study is the paper innovation which has been done for the first time in Iran.  
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Type of Study: Original Research - Empirical | Subject: Monetary Economics
Received: 17 Aug 2021 | Accepted: 5 Mar 2022 | Published: 4 Oct 2022

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