Workshop on Monetary Policy and Inequality - April 3-4, 2014

Since at least the early 1990s, income and wealth inequality has been rising in many economies. The interaction between monetary policy and inequality is not clear, and there's not been a lot of research conducted on this topic. But it's clearly of interest to the Federal Reserve (see, for example, here). The Council on Economic Policies (CEP) and Atlanta Fed organized a small workshop on Monetary Policy and Inequality on April 3–4. The workshop was not intended to reach specific policy relevant conclusions; instead, the primary goal was to help foster more research on the subject by bringing together a group of researchers, most of whom have only recently started working on the topic. As a result, the specific focus and methods used in the papers, many of which are still quite preliminary, varied widely. Of the 11 papers, some looked at inequality from the perspective of the distribution of wealth, some in terms of the distribution of income. Some papers focused on the empirical connection between inequality and inflation, while others looked more specifically at models of monetary policy when there are heterogeneous consumers.

The workshop generated vigorous debate about the approaches and techniques presented, and the authors received feedback on their research from participants and discussants. An interesting presentation by Ariel Shwadyder, one of the authors of the McKinsey Global Institute 2013 report QE and Ultra-Low Rates: Distributional Effects and Risks, generated lively discussion. The workshop results will be reflected in the preparations for a one-week conference on Monetary Policy and Sustainability, which CEP is organizing at the Rockefeller Foundation's Bellagio Center in June 2014.

Because many of the papers are preliminary, links are available for only a few of those presented. As other papers are completed, they will be added to the site.