Monetary Policy and the Distribution of Income and Wealth

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Co-organized with the Federal Reserve Bank of St. Louis and Washington University
St. Louis, United States
Call for Papers (PDF)

  • There has been intense focus recently on inequality in income and wealth across and within countries. Both developed and developing countries have experienced a marked increase in the gap between high and low income households, as well as an increase in the concentration of income and wealth among the extremely wealthy.

    We are interested in understanding the causes and consequences of income and wealth inequality, and the effects of monetary policy on the distribution of income and wealth. While there is some work on the distributional effects of monetary policy, there are many important research questions in this area that we think should be answered. The role of central banks with regard to this topic is important, but under-researched.

    Workshop
    Against this background, the Council on Economic Policies (CEP), the Federal Reserve Bank of St. Louis, and Washington University in St. Louis organized a workshop on Monetary Policy and the Distribution of Income and Wealth, on September 11-12, 2015 at the Federal Reserve Bank of St. Louis.

    The event brought together researchers from academic institutions, central banks, and other non-academic research institutions.

    This workshop is part of a larger CEP program on monetary policy and sustainability. It followed a workshop that was co-organized by CEP and the Federal Reserve Bank of Atlanta on monetary policy and inequality in 2014.

    Topics
    We were particularly interested in the following topics, but also discussed papers that do not deal with these issues specifically:
    – What are the effects of monetary policy on inequality in income and wealth? What are the main transmission channels for these effects?
    – What are the effects of inflation on inequality?
    – What are the effects of unconventional monetary policies on the distribution of income and wealth?
    – Do extended periods of time at the zero lower bound matter for inequality?
    – What would be the impact of alternative monetary policy targets and instruments on income and wealth distribution?

  • Friday, September 11, 2015
    13.00-14.00Mortgages and Monetary Policy
    Carlos Garriga, Federal Reserve Bank of St. Louis
    Finn Kydland, University of California – Santa Barbara
    Roman Sustek, Queen Mary University of London (Paper)
    Discussant: Amir Kermani, University of California – Berkeley
    14.00-15.00The Transmission of Monetary Policy through Redistributions and Durable Purchases
    Vincent Sterk, University College London (Paper)
    Silvana Tenreyro, London School of Economics
    Discussant: Carlos Garriga, Federal Reserve Bank of St. Louis

    15.00-15.30Break
    15.30-16.30Distributional Effects of Monetary Policy
    Matthias Doepke, Northwestern University
    Martin Schneider, Stanford University (Paper)
    Veronika Selezneva, Northwestern University
    Discussant: Stephen Williamson, Federal Reserve Bank of St. Louis
    16.30-17.30Monetary Policy and the Redistribution Channel
    Adrien Auclert, Princeton University (Paper)
    Discussant: Makoto Nakajima, Federal Reserve Bank of Philadelphia
    19.00-Dinner
    Saturday, September 12, 2015
    09.00-10.00Inequality and Optimal Monetary Policy
    Dong-Whan Ko, Korea Information Society Development Institute (Paper)
    Discussant: Pierre Monnin, Council on Economic Policies
    10.00-11.00The Power of Forward Guidance Revisited
    Alisdair McKay, Boston University (Paper)
    Emi Nakamura, Columbia University
    Jon Steinsson, Columbia University
    Discussant: Marco Airaudo, Drexel University
    11.00-11.30Break
    11.30-12.30Optimal Monetary Policy with Heterogeneous Money Holdings
    Francesco Lippi, EIEF and University of Sassari
    Stefania Ragni, University of Sassari
    Nicolas Trachter, Federal Reserve Bank of Richmond (Paper)
    Discussant: Fernando Martin, Federal Reserve Bank of St. Louis
    12.30-13.30Lunch
    13.30-14.30Real Balance Effects When the Nominal Interest Rate is Zero
    Anton Braun, Federal Reserve Bank of Atlanta (Paper)
    Takemasa Oda, Bank of Japan
    Discussant: Joseph Haslag, University of Missouri-Columbia
    14.30-15.30Optimal Monetary Policy at the Zero Lower Bound
    Costas Azariadis, Washington University and Federal Reserve Bank of St. Louis
    James Bullard, Federal Reserve Bank of St. Louis
    Aarti Singh, University of Sidney
    Jacek Suda, Narodowy Bank Polski
    Discussant: Roger Farmer, University of California – Los Angeles

  • – Michael Kumhof, Bank of England
    – Prakash Loungani, International Monetary Fund
    – Pierre Monnin, Council on Economic Policies
    – Yongseok Shin, Washington University and Federal Reserve Bank of St. Louis
    – Stephen Williamson, Federal Reserve Bank of Louis