DP 2024/2 - El-Shagi, M.: The Effect of Monetary Policy Shocks on Inequality in the Eurozone

Makram El-Shagi

CFDS Discussion Paper 2024/2


In this paper, we assess the impact of monetary policy shocks on the income distribution in the Eurozone after the Global Financial Crisis, i.e., a time of unconventional monetary policy. Unlike previous papers that focus on the precrisis era, where monetary policy was primarily conducted through interest rates, expansionary policy typically increases inequality. This can be mitigated by highly developed financial markets and sound institutions that limit rent seeking.

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