Aggressive monetary policy hits poorer harder – research

New York Fed authors find stabilising demand shocks has positive distributional outcomes


Monetary policy-makers’ responses to supply and demand shocks have diverging distributional outcomes for poorer households, researchers with the Federal Reserve Bank of New York find.

“Facing demand shocks, stabilising inflation and real activity go hand in hand, with very large benefits for households at the bottom of the wealth distribution,” they write. “The converse is true however when facing supply shocks: stabilising inflation makes real outcomes more volatile, especially for poorer

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