ECB Pushes for Deeper Analysis of Inequality in Gauging Policy
- ‘Several puzzles remain’ on policy effects across households
- Study suggests recent monetary stimulus has eased inequality
The European Central Bank headquarters in Frankfurt.
Photographer: Armando Babani/AFP/Getty Images
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The European Central Bank says further efforts must be made to understand what the unequal distribution of income and wealth across the euro area means for the impact of its monetary policy.
As households differ substantially in terms of sensitivity to business cycles and consumption patterns, “the distribution of income and wealth plays a key role in shaping the transmission of monetary policy to economic activity and inflation,” ECB researchers said in an economic bulletin article published Wednesday.