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Journal Articles Brookings Papers on Economic Activity Year : 2022

Monetary Policy and Racial Inequality


This paper aims at an improved understanding of the relationship between monetary policy and racial inequality. We investigate the distributional effects of monetary policy in a unified framework, linking monetary policy shocks both to earnings and wealth differentials between black and white households. Specifically, we show that, although a more accommodative monetary policy increases employment of black households more than for white households, the overall effects are small. At the same time, an accommodative monetary policy shock exacerbates the wealth difference between black and white households, because black households own fewer financial assets that appreciate in value. Over a fiveyear horizon, the employment effects remain substantially smaller than the countervailing portfolio effects.
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hal-03881327 , version 1 (01-12-2022)



  • HAL Id : hal-03881327 , version 1


Alina K Bartscher, Moritz Kuhn, Moritz Schularick, Paul Wachtel. Monetary Policy and Racial Inequality. Brookings Papers on Economic Activity, In press. ⟨hal-03881327⟩
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