Distributional Effects of Monetary Policy


Valentina Bonifacio ; Luis Brandao-Marques ; . Nina T Budina ; Balazs Csonto ; Chiara Fratto ; Philipp Engler ; Davide Furceri ; Deniz O Igan ; Rui Mano ; Machiko Narita ; Murad Omoev ; Gurnain Kaur Pasricha ; Helene Poirson Ward

Publication Date:

July 30, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.


As central banks across the globe have responded to the COVID-19 shock by rounds of extensive monetary loosening, concerns about their inequality impact have grown. But rising inequality has multiple causes and its relationship with monetary policy is complex. This paper highlights the channels through which monetary policy easing affect income and wealth distribution, and presents some quantitative findings about their importance. Key takeaways are: (i) central banks should remain focused on macro stability while continuing to improve public communications about distributional effects of monetary policy, and (ii) supportive fiscal policies and structural reforms can improve macroeconomic and distributional outcomes.


Working Paper No. 2021/201




Publication Date:

July 30, 2021



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