The impact of monetary policy on income inequality: evidence from Eurozone markets

Liosi, Konstantina; Spyrou, Spyros I.

doi:10.1108/jes-07-2020-0328

Cited by 9 publications

(3 citation statements)

References 52 publications

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“…Specifically, monetary policy can The empirical findings imply that China's easy monetary policy further expanded the income disparity between urban and rural areas. This finding is similar to the studies of Taghizadeh-Hesary et al [59] and Liosi and Spyrou [79], which argue that easy monetary policy worsens income inequality levels. However, unlike previous studies, we find that the effect of monetary policy on the urban-rural income disparity in China has a time-varying feature.…”

Section: The Time-varying Effects Of Monetary Policy On Urban-rural I...supporting

confidence: 91%

The Dynamic Effects of Urban–Rural Income Inequality on Sustainable Economic Growth under Urbanization and Monetary Policy in China

Cheng

2022

Sustainability

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Income inequality in China has become increasingly serious since the beginning of the economic reform period in the 1970s, with urban–rural income inequality playing a large role. Urbanization policy and monetary policy are currently important economic policy tools for the Chinese government. In order to investigate the influence of inequality on the economy and to provide recommendations for ensuring the sustainability of growth, we study the effect of urban–rural income inequality on economic growth in the context of urbanization and monetary policy in China between 2002 and 2021. Using a flexible time-varying parametric structural vector auto-regression (TVP-VAR) model and a robust Markov chain Monte Carlo (MCMC) algorithm, our empirical results show that the effect is time-varying, with inequality promoting growth in the early years but affecting it adversely at later stages. Currently, urbanization mitigates inequality and promotes growth simultaneously, while easy monetary policy worsens inequality and affects growth adversely in the long term. We suggest that the authorities need to consider the implementation of policy rebalancing to ensure that the sustainability of economic development is not jeopardized because of worsening income disparity. Proactive urbanization policy and prudent monetary policy are viable rebalancing options.

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Section: The Time-varying Effects Of Monetary Policy On Urban-rural I...supporting

confidence: 91%

The Dynamic Effects of Urban–Rural Income Inequality on Sustainable Economic Growth under Urbanization and Monetary Policy in China

Cheng

2022

Sustainability

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“…Both theoretical and empirical studies also witness that, in addition to the declining labour share, other factors driving inequality could be high inflation (Siami-Namini and Hudson 2019;Liosi and Spyrou 2022;Tomkiewicz 2018), poor governance (Bahamonde and Trasberg 2021), low financial development (Kim 2016) and some structural factors such as the share of the shadow economy (Yap et al 2018) or share of manufacturing employment compared to agriculture and service (Pariboni and Tridico 2019;Vo et al 2019). Conversely, effective government can and should reduce inequality in several ways.…”

Section: Literature Reviewmentioning

confidence: 99%

The Labour Share, Government Expenditure and Income Inequality of Post-Soviet Countries

Sergi,

Balashova,

Ratner

2023

Economies

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This study analyses the influence of economic growth on inequality, concentrating on the role of governments as mediators. The period studied is from 2000 to 2020, encompassing 11 post-Soviet countries. The primary estimation method used is the two-stage least squares for panel data. Despite the differences in the economic and political systems at the current development stage, the post-Soviet countries share a common pattern in terms of the relationship between economic growth, the labour income share and the level of inequality, which we first show in this article. Government expenditure has the potential to reduce inequality. However, its effectiveness depends largely on government efficiency and the development of democratic institutions. Despite the increase in government spending on education, more is needed to reduce income inequality. Increased economic performance, productivity, and high-quality state institutions are necessary for this change.

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“…In another study conducted in Sri Lanka, Kim & Samarasekara (2022) found that public expenditure is ineffective for the policy objective; instead, it raises inequality. Liosi and Spyrou (2022) pointed out that, on average, monetary policy positively impacts income inequality. A more detailed analysis demonstrates that for Ireland, Germany and the Netherlands, monetary policy has no effect on income inequality or a weak impact (France).…”

Section: Introductionmentioning

confidence: 99%

Fiscal illusion and income inequality: an empirical investigation

Zaroki

Barfurushi

Otaghsara

2023

IJSE

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PurposeThe present study investigates the role of fiscal illusion on income inequality in 46 selected countries in terms of income and development levels from 2002 to 2017.Design/methodology/approachThe effect of fiscal illusion on income inequality is tested using the two-step system generalized method of moment (SYS-GMM) estimator.FindingsThe findings reveal the negative effect of fiscal illusion on income inequality, which means increasing fiscal illusion decreases income inequality in 46 selected countries. As in other countries, income inequality declines when fiscal illusion increases in high-income and developed countries, although the redistributive effect of fiscal illusion is more in high-income and developed countries than in other countries. In addition, the results demonstrate the positive effect of unemployment, urbanization and inflation as well as the negative effect of trade openness on income inequality in all three models.Originality/valuePrevious studies have examined the role of government in controlling income inequality from different perspectives; however, no study has detected the role of government in income distribution regarding fiscal illusion.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2022-0311.

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The impact of monetary policy on income inequality: evidence from Eurozone markets

Cited by 9 publications

References 52 publications

The Dynamic Effects of Urban–Rural Income Inequality on Sustainable Economic Growth under Urbanization and Monetary Policy in China

The Dynamic Effects of Urban–Rural Income Inequality on Sustainable Economic Growth under Urbanization and Monetary Policy in China

The Labour Share, Government Expenditure and Income Inequality of Post-Soviet Countries

Fiscal illusion and income inequality: an empirical investigation

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