Five Facts About the Distributional Income Effects of Monetary Policy

34 Pages Posted: 11 May 2021

See all articles by Niklas Amberg

Niklas Amberg

Sveriges Riksbank - Research Division

Thomas Jansson

Sveriges Riksbank - Research Division

Mathias Klein

Sveriges Riksbank - Research Division

Anna Rogantini Picco

Sveriges Riksbank - Research Division

Date Written: 2021

Abstract

We use Swedish administrative individual-level data to document five facts about the distributional income effects of monetary policy. (i) The effects of monetary policy shocks are Ushaped with respect to the income distribution—i.e., expansionary shocks increase the incomes of high- and low-income individuals relative to middle-income individuals. (ii) The large effects in the bottom are accounted for by the labor-income response and (iii) those in the top by the capital-income response. (iv) The heterogeneity in the labor-income response is due to the earnings heterogeneity channel, whereas (v) that in the capital-income response is due to the income composition channel.

JEL Classification: C550, E320, E520

Suggested Citation

Amberg, Niklas and Jansson, Thomas and Klein, Mathias and Rogantini Picco, Anna, Five Facts About the Distributional Income Effects of Monetary Policy (2021). CESifo Working Paper No. 9062, Available at SSRN: https://ssrn.com/abstract=3842326 or http://dx.doi.org/10.2139/ssrn.3842326

Niklas Amberg (Contact Author)

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden

Thomas Jansson

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden

Mathias Klein

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden

Anna Rogantini Picco

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden

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