The impact of (un)conventional expansionary monetary policy on income inequality – lessons from Japan
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.