JEL Code: D31

Karl-Friedrich Israel; Tim Florian Sepp; Nils Sonnenberg

Abstract

This article analyzes the impact of monetary policy on household saving in Japan between 1993 and 2017. Using annual data from the Japan Panel Survey of Consumers it is shown that monetary expansion has contributed to a widening gap in households’ net saving through an adverse effect on the volume of saving of non-academic households. In contrast, households with at least one academic tend to be able to compensate these adverse effects of monetary expansion or can even benefit from it. The article documents how inequality in terms of the ability to build up wealth has increased in Japan over the past decades. The statistical analysis controls for household size as well as potential spatial effects in the transmission mechanism of monetary policy on household saving.

Keywords: household saving, inequality, interest rate, Japan, Monetary policy.

JEL Codes: D31, D63, E52, E58.

Erschienen in

Applied Economics, 1-17.

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Karl-Friedrich Israel; Sophia Latsos

Abstract

This paper analyzes the impact of conventional and unconventional monetary policy on income inequality in Japan, using hitherto unexplored data from the Japan Household Panel Survey. Empirical evidence shows that expansionary monetary policy in Japan has contributed to diminishing the gender pay gap through an increase in working time of women relative to men, but also to increasing the education pay gap. These effects may have materialized via the aggregate demand channel and the labour productivity channel. In contrast, expansionary monetary policy has had no significant impact on the development of the age pay gap.

Keywords: income inequality, Japan, low interest rate policy, Monetary policy, unconventional monetary policy.

JEL Codes: D31, D63, E52, E58.

Erschienen in

Applied Economics Volume 52, 2020 - Issue 40.

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