Monetary policy boosts wealth of top earners through stock market gains
The article explores how monetary policy, asset prices, and financial sector development impact income inequality. The researchers found that the Federal Reserve's low interest rate policy during the financial crisis led to a rise in stock prices, benefiting wealthier households. They also discovered that monetary policy reacts to income inequality and that changes in stock prices affect income inequality. The study used data from the U.S and found a significant relationship between stock market developments and the income of the top 1 percent earners. Overall, the findings suggest that monetary policy decisions can influence income distribution, particularly benefiting the wealthiest individuals.