Kazuhiko Kakamu (Kobe University)
How does monetary policy affect income inequality in Japan? Evidence from grouped data
Co-author: Martin Feldkircher (Oesterreichische Nationalbank (OeNB))
Abstract: We examine the effects of monetary policy on income inequality in Japan using a novel econometric approach that jointly estimates the Gini coefficient based on micro-level grouped data of households and the dynamics of macroeconomic quantities. Our results indicate different effects on income inequality depending on the monetary policy measure under consideration: A traditional rate increase decreases income inequality, whereas a reduction of asset purchases leads to more inequality. Movements of inflation expectations and equity prices might account for theses differences.