QE’s impact on income inequality

Who benefited from all that money?

The amount of money that has been pumped in to US economy (and through that to the world economy) is mind boggling. The graph below shows the increase in US money base.

US money base

Source: St. Louis Federal Reserve Bank https://research.stlouisfed.org/fred2/series/BASE

There has been a lot of talk about where all this money went.  The Fed itself revised its mortgage assistance programs a few times to ensure that the money that came in from quantitive easing was used for its intended purposes and produced the desired results.

Looking back now with years of data, the evidence is not all that supportive of the measures.  As ECB is now pushing its QE buttons, there are important lessons to be learned. For example,

These findings suggest that, at least in terms of how it was transmitted through the mortgage market, recent unconventional monetary policy had less of a beneficial effect for the areas of the country that were doing relatively poorly at the time the policy was announced.

The above lesson is from research linked below by Andreas Fuster and his co-authors which provides valuable insights for policy makers.

https://agenda.weforum.org/2015/11/are-central-banks-making-inequality-worse/?utm_content=buffer1d9d6&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

https://agenda.weforum.org/2015/11/are-central-banks-making-inequality-worse/?utm_content=buffer1d9d6&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

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