Salle 3001

Jacob SUNDRAM (University of Copenhagen ) “Monetary Policy, Heterogeneous Returns, and Top Inequality”

Abstract:  Who are the winners and losers from monetary policy? I build a model where households earn different returns on their wealth to study this. I find that the rich disproportionately gain from easy monetary policy: The top 0.1% gain 11% of the income from monetary policy. This is almost ten times standard models, where all households earn the same return. Fiscal policy is more equal. Thus, poor and rich households disagree: poor households prefer using fiscal policy in recessions, while rich prefer monetary policy.