Monetary Policy and Inequality

Question 1: How large is the impact of monetary policy on the joint distribution of income and wealth?

Question 2: What role should inequality play in the monetary policy decisions (interest rate policy and quantitative easing)?

Summary

The majority of the CfM panel of experts on the UK economy thinks monetary policy has only a small impact on wealth and income inequality. A larger majority of nearly 90% of the panel believes that inequality should play a minimal role or no role in the Bank of England’s monetary policy decisions.

Background

The July 2021 CfM survey asked the members of its UK panel to evaluate the impact of central banks on inequality and whether the Bank of England should consider income and wealth distribution in its monetary policy decisions. 

The Bank of England and Inequality

By most measures, income inequality has increased in the UK in the past several decades. The Bank of England’s remit is for price stability, with no mention of inequality or distributional implications in the 2021 update. Recent academic research has paid more attention to the effect of monetary policy on inequality and some have called for a greater role for distributional considerations in monetary policymaking.

The academic literature on monetary policy and inequality is still in its infancy and is split on whether looser monetary policy increases or decreases income inequality. Using survey data Mumtaz and Theophilopoulou (2017) show that looser monetary policy decreases inequality in labour earnings, consumption, and expenditures in the UK; Coibion et al (2017) report similar findings for the US. Considering the racial dimension, Bartscher (2021) show that looser monetary policy increases the income and employment rate of black households relative to white.

Cloyne, Ferreira, and Surico (2020) argue it is the consumption of mortgagors that increases the most when interest rates decline, in a study of UK households. This implies that loose monetary policy improves the lot of middle-income households the most (an “inverted-U-shape” response of consumption to lower interest rates along the income distribution). Albert and Gómez-Fernández come the exact opposite conclusion, showing simulations that predict that the income and wealth of the poorest and wealthiest increase the most when monetary policy is loose.

Amberg et al (2021) report similar findings using Swedish administrative data, with the richest and poorest households benefiting the most from low interest rates. In contrast, Andersen et al (2021) investigate the wealth of Danish households, also using administrative data, and find a monotonic relationship whereby lower interest rates increase wealth and total income more the wealthier is the household to begin with. Further studies on this topic can be found in a conference organized by the Bank of England and the Centre for Macroeconomics on the topic of inequality and monetary policy.

Several channels have been suggested for the effects of monetary policy on inequality. First is the employment channel whereby lower income households are more likely to lose jobs in recessions, while looser monetary policy increases employment (Draghi, 2016). Second is the asset price channel. Richer households hold riskier and more cyclical assets and benefit more from looser monetary policy (Bernanke, 2015). This is the channel implied in the study of Andersen at al (2021), while Cloyne, Ferreira, and Surico (2020) rely on debt deflation of levered mortgagors. Doepke and Schneider (2006) point to a similar channel.

Policymakers have taken heed and have begun considering the implications of monetary policy for inequality. The annual report of the Bank of International Settlements discusses this topic but concludes that monetary policy has had only a small impact on inequality and can do little to reverse the broader forces that have caused increases in wealth and income inequality. (See also Martin Wolf’s FT article.) In a 2014 speech, Andy Haldane, then a member of the Financial Policy Committee of the Bank of England states that there is little that a central bank can do to combat income inequality but that inequality does affect the policies a central bank will need to conduct to ensure price and financial stability. Feiveson et al. (2020) suggest that central banks can do more (or less harm) for income inequality if they followed “average inflation targeting” strategies rather than maximum inflation targeting as in the case of the European Central Bank. The European Central Bank itself has analysed the effects of its policies on income distribution and evaluates that quantitative easing has reduced inequality (and regional inequality) through the employment channel. Turning from income to wealth, the Resolution Foundation finds that quantitative easing in the UK has exacerbated wealth inequality, through the asset price channel.  The House of Lords has called for more research on this topic, but argues that it is the role of fiscal policy rather than monetary policy to counteract the distributional implications of quantitative easing policies.

This month’s CfM survey asks about the monetary policy and inequality. The first question asks whether monetary policy has a “large” impact on the distribution of income and wealth over the business cycle or in the long run. In evaluating whether the effect is “large,” consider whether it is large enough to potential require corrective policy either by the Bank of England itself or through other policy tools (e.g. fiscal policy). When evaluating the magnitude of the impact consider monetary policy shifts that are of the magnitudes observed in the typical conduct of the Bank of England, in its attempts to meet its inflation objectives. You are not being asked whether looser monetary policy increases or decreases inequality but may choose to discuss this in your comments.

Question 1: How large is the impact of monetary policy on the joint distribution of income and wealth?

Twenty-eight panel members responded to this question. A slight majority views the impact of monetary policy on inequality as being small (46% of respondents) or very small (7% of respondents). A smaller share sees the impact as being large (39%) with the remainder (7%) expressing no opinion.

Panelists who think monetary policy has only a small effect on equality believe that other factors determine the distribution of income and wealth in the long run. Jagjit Chadha (National Institute for Social and Economic Research) writes that in the long run “real income [and] wealth… are determined by tastes and technology.” David Cobham (Heriot Watt University) points to political determinants of inequality in stating that “the sources of the growing inequality of recent decades—a failure of and a stain upon democratic society and capitalist economy—lie elsewhere, in the increased imbalance of power in the labour market resulting mainly from changes in industrial structure, the suppression of trade unions and the perceived lack of any alternative economic/social model.”  

The small impact of monetary policy on inequality is also because it is a cyclical tool that has only minor permanent effects on the real economy. Charles Bean (London School of Economics) notes that “central banks are setting policy so as to keep output near potential and inflation at target. So it is wrong to think of monetary policy as an independent influence on inequality. It is instead the necessary reflection of all the other factors that affect demand and supply in the economy (i.e. the determinants of 'r*', the equilibrium real rate of interest).”

The effects of monetary policy on inequality changes over time and has heterogeneous effects, making it difficult to assess its full distributional implications. Monetary policy also has differing effects on the distribution of wealth and on income, in ways that may cancel out on average. Panicos Demetriades (University of Leicester) explains that “loose monetary policy may well increase employment opportunities which benefit the unemployed and the least well off, [while raising] asset prices,” and thus benefiting the poor and rich in different ways. Charles Bean writes that “the impact is potentially ambiguous and likely to be state-dependent. In particular, looser monetary policy tends to benefit those without jobs as well as benefitting those with assets (and vice versa).” David Miles (Imperial College) adds: “The effects of monetary policy on incomes and wealth come through several different channels… These different effects are partially offsetting and are probably quite different at different points in business cycles. They also affect people of different ages in different ways - something which evens out over a person's life.”

The minority view held that the monetary policy impacts inequality substantially through its effects on asset prices, particularly when quantitative easing is involved. Roger Farmer (Warwick University) summarizes this opinion: “Since both housing wealth and stock market wealth are very unequally distributed, these policy decisions also have large impacts on the wealth distribution.” Morten Ravn (University College London) points to his own research that uncovers equilibrium effects whereby monetary policy “impact[s] interest rate spreads between borrowing and savings rates which affects the extent to which households can self-insure against income shocks.” Finally, Kate Barker (British Coal Staff Superannuation Scheme and University Superannuation Scheme) argues that “good monetary policy” can avoid hysteresis effects and thereby mitigate the long run distributional impacts of recessions.

The panel was next asked whether the Bank of England itself had a role in considering income inequality in its policy decisions.

Question 2: What role should inequality play in the monetary policy decisions (interest rate policy and quantitative easing)?

Twenty-eight members of the panel answered this question. A large majority thinks that distributional implications should have a minimal role (57% of respondents) or no role at all (29% of respondents) in the Bank of England’s policy decisions. Only 14% believes that the inequality should play a substantive role in monetary policy decisions.

The majority view points out that whatever the distributional effects of monetary policy, it is up to fiscal policy and political to address the distribution of income, not the role of a central bank. Charles Bean argues that “distributional issues are at the heart of politics and distributional questions should be decided by politicians not the unelected technocrats who staff central bank policy committees.” Further, “the central bank does not have good tools to deal with inequality; fiscal policy can be more targeted” Michael McMahon writes. He too believes that “it is important that the objectives of redistributive policies reflect the preferences of the electorate,” not that of the monetary policy committee. Roger Farmer worries that “f the Bank becomes involved in highly politicized decisions including, but not limited to, asset purchases designed to redistribute income and wealth, there is a danger of losing the current political consensus for Bank independence.” Costas Milas (University of Liverpool) summarizes the majority view in arguing that we cannot expect the Bank of England to be “Bob the Builder, to fix it all.” It’s main role, Milas argues is to “defend price stability”.   

The minority view nevertheless supports some distributional considerations in monetary policy decisions. “Inequality concerns should be on the table,” argues Morten Ravn, who believes that inequality “should be one of the issues discussed when determining the stance of monetary policy.” Several panel members (David Miles, Wouter den Haan) reject inequality considerations in monetary policy decisions because our state of knowledge on the topic is still in its infancy. In this regard, Wendy Carlin (University College London) calls on central banks to improve their “understanding of the determinants of changes in income and wealth inequality in order to understand better the nature of business and financial cycles, and to learn about how their decisions in line with their existing mandates affect outcomes for inequality.”

References and Further Readings

Albert, J. F., & Gómez-Fernández, N. (2021). Monetary policy and the redistribution of net worth in the US. Journal of Economic Policy Reform, 1-15.

Amberg, N., Jansson, T., Klein, M., & Rogantini Picco, A. (2021). “Five Facts about the Distributional Income Effects of Monetary Policy,” CESifo Working Paper No. 9062.

Andersen, A. L., Johannesen, N., Jørgensen, M., & Peydró, J. L. (2021). “Monetary policy and inequality,” unpublished manuscript.

Bartscher, A. K., Kuhn, M., Schularick, M., & Wachtel, P. (2021). “Monetary policy and racial inequality,” unpublished manuscript

Coibion, O., Gorodnichenko, Y., Kueng, L., & Silvia, J. (2017). Innocent Bystanders? Monetary policy and inequality. Journal of Monetary Economics, 88, 70-89.

James Cloyne, Clodomiro Ferreira, Paolo Surico, Monetary Policy when Households have Debt: New Evidence on the Transmission Mechanism, The Review of Economic Studies, Volume 87, Issue 1, January 2020, Pages 102–129, https://doi.org/10.1093/restud/rdy074

Doepke, M., & Schneider, M. (2006). “Inflation and the redistribution of nominal wealth.” Journal of Political Economy, 114(6), 1069-1097.

Draghi, M. (2016). “Stability, equity and monetary policy.” German Institute for Economic Research (DIW).

Feiveson, L., Gornemann, N., Hotchkiss, J. L., Mertens, K., & Sim, J. (2020). “Distributional considerations for monetary policy strategy,” unpublished manuscript.

de Ferra, Sergio, Kurt Mitman, and Federica Romei, “Household heterogeneity and the transmission of foreign shocks,” Journal of International Economics, Volume 124, 2020.

Mumtaz, H., & Theophilopoulou, A. (2017). “The impact of monetary policy on inequality in the UK. An empirical analysis.” European Economic Review, 98, 410-423.

 

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How the experts responded

Question 1

Participant Answer Confidence level Comment
Ethan Ilzetzki's picture Ethan Ilzetzki London School of Economics Small Confident
Monetary policy reflects interest rate changes around a long-run neutral rate of interest. This neutral interest rate has important distributional implications but is mostly outside of the control of the Bank of England. If monetary policy is conducted appropriately, the interest rate will be above the neutral rate roughly as often as it is below, so will have only temporary or second order implications for the distribution of wealth and income. The only first-order impact, in my view, is the effect of monetary policy on unemployment, which the Bank of England already considers to some extent.
Jagjit Chadha's picture Jagjit Chadha National Institute of Economic and Social Research Very Small Confident
We tend work by the proposition in normal times that monetary policy affects long run nominal magnitudes and rather than real income or wealth, which are determined by tastes and technology. In the short run changes in monetary policy will affect aggregate demand through a variety of channels that may impact more disproportionally on those cannot hedge themselves against interest rate or employment risk. But that should not lead to a permanent change in real living standards.
Jumana Saleheen's picture Jumana Saleheen CRU Group Small Confident
The evidence suggests that monetary policy does affect the distribution of income and wealth. QE is thought to have a larger impact on inequality than changes in interest rates.
Martin Ellison's picture Martin Ellison University of Oxford Small Confident
Panicos Demetriades's picture Panicos Demetriades University of Leicester Small Very confident
There’s no doubt that monetary policy has unintended consequences, however these are likely small, partly because they are working in opposite directions. For example, loose monetary policy may well increase e ployment opportunities which benefit the unemployed and the least well off. It at the same time raises asset prices, more so if it involves quantitative easing.
Nicholas Oulton's picture Nicholas Oulton London School of Economics Small Confident
Tighter monetary policy works by raising unemployment (amongst other things). This is likely to increase poverty though not necessarily inequality. But then you have to ask: why was tightening considered necessary? The question requires us to compare at least two different monetary policy regimes, the current one and some alternative such as price level targeting or Friedman's k% rule. Which is better for inequality is not obvious but arguably any difference is small.
David Cobham's picture David Cobham Heriot Watt University Small Confident
Monetary policy has probably worsened inequality by raising (for a much longer period than had been expected back in 2009) the prices of unequally held assets, but it has probably reduced inequality (relative to some relevant counterfactual) by making the post-financial crisis recession less deep. But the main point has to be that the sources of the growing inequality of recent decades - a failure of and a stain upon democratic society and capitalist economy - lie elsewhere, in the increased imbalance of power in the labour market resulting mainly from changes in industrial structure, the suppression of trade unions and the perceived lack of any alternative economic/social model.
Paul De Grauwe's picture Paul De Grauwe London School of Economics Small Not confident
Roger Farmer's picture Roger Farmer University of Warwick Large Very confident
Interest rate decisions have large measurable effects on asset values. Since both housing wealth and stock market wealth are very unequally distributed, these policy decisions also have large impacts on the wealth distribution. The impact on income is also significant but smaller in magnitude.
Michael McMahon's picture Michael McMahon University of Oxford Large Confident
There are clearly channels of monetary policy (and also financial policies) that benefit asset prices and therefore directly affect the position of those that hold positive net financial assets. The effect of QE on financial assets is one obvious one, but also effects on house prices which likely affect a wider number of households.
Federica Romei University of Oxford Large Confident
I would have said medium but it was not among the options.
David Miles's picture David Miles Imperial College Small Confident
The effects of monetary poicy on incomes and welath come through several different channels (via demand and employment which affects wages and unemployment, via asset price effects which has more impact on the distrubtion of wealth than income, via shifts in income after interest payments, through knock on effects on rents and so on). These different effects are partilaly offsetting and are probabaly quite different at different points in business cycles. They also affect people of differeent ages in different ways - something which evens out over a person's life. So it is not surprising that there is no reliable, consistent and clear evidence of the impact of monetary policy on the distrubtion of income and welath.
Wouter Den Haan's picture Wouter Den Haan London School of Economics Large Not confident
To be precise, monetary policy CAN have a large impact on inequality but then I am thinking of sustained quantitative easing that we have seen since the financial crisis.
Patrick Minford's picture Patrick Minford Cardiff Business School Small Very confident
The role of monetary policy is to stabilise the economy- inflation and output- and set prices in the long run. Hence its effect on the economy is short run. Inequality is the result of long run tendencies in the economy so monetary policy will not affect it except temporarily- being temporary, its effect is small.
Chryssi Giannitsarou's picture Chryssi Giannitsarou University of Cambridge, Faculty of Economics Large Not confident
Wendy Carlin's picture Wendy Carlin University College London No opinion Not confident
By 'no opinion', I mean 'it all depends', as the cited literature suggests. The effects on both income and wealth inequality come through a wide variety of channels, affecting different parts of each distribution and being affected by the specific cause of the phase of the business cycle (e.g. loose monetary policy in a post housing bust recession would be expected to have a different effect on wealth inequality than a recession caused by an external supply shock) and by national institutions and tax rules.
Gino A. Gancia's picture Gino A. Gancia Queen Mary University of London Large Confident
Sir Charles Bean's picture Sir Charles Bean London School of Economics Small Not confident
The impact is potentially ambiguous and likely to be state-dependent. In particular, looser monetary policy tends to benefit those without jobs as well as benefitting those with assets (and vice versa). In addition, it should be remembered that, broadly speaking, central banks are setting policy so as to keep output near potential and inflation at target. So it is wrong to think of monetary policy as an independent influence on inequality. It is instead the necessary reflection of all the other factors that affect demand and supply in the economy (i.e. the determinants of 'r*', the equilibrium real rate of interest).
John VanReenen's picture John VanReenen London School of Economics Small Confident
Morten Ravn's picture Morten Ravn University College London Large Very confident
Inequality dispalys countercyclical movements. There are many channels through which monetary policy impact on inequality. One channel is through income effects of changes in returns on assets which depend on the net asset position of households. Another is through general equilibrium effects impacting more directly on lower income households. In my own work, we have looked at the impact on interest rate spreads between borrowing and savings rates which affects the extent to which households can self-insure against income shocks. This channel is quantitatively important. Monetary policy in itself may not be able to address the issue, will most likely have to work in tandem with fiscal policy (through transfers) and with financial sector regulation (through spreads).
Michael Wickens's picture Michael Wickens Cardiff Business School & University of York Large Very confident
In principle inflation clearly has a large impact on income depending on how much income is indexed. This includes wage income, pensions and profits. QE has clearly distorted asset prices and hence wealth. This is not, however, a reason to change the Bank’s inflatio remit. QE as currently used is really fiscal policy to avoid raising taxes which would be distortionary to income as well as wealth. This aspect of monetary policy is not a desirable long-run feature. Ironically, the price for using QE to maintain after tax income stability has been increased wealth inequality.
Linda Yueh's picture Linda Yueh London Business School No opinion Not confident
Costas Milas's picture Costas Milas University of Liverpool Very Small Confident
Ricardo Reis's picture Ricardo Reis London School of Economics Large Very confident
Kate Barker's picture Kate Barker British Coal Staff Superannuation Scheme and University Superannuation Scheme Large Confident
Good monetary policy which managers cycles well will support less inequality stemming from hysteresis. Poor monetary policy would have the opposite effect. The persistent decline in long-term real interes rates may well be due to other factors and only somewhat to active monetary policy = some aspects of the weather monetary policy cannot change.
Natalie Chen's picture Natalie Chen University of Warwick Small Not confident
Simon Wren-Lewis's picture Simon Wren-Lewis University of Oxford Large Confident
Lucio Sarno's picture Lucio Sarno Cambridge University Small Confident

Question 2

Participant Answer Confidence level Comment
Ethan Ilzetzki's picture Ethan Ilzetzki London School of Economics Minimal role Confident
The central bank should focus on price stability and fiscal policy should deal with income and wealth inequality, including those arising due to the distributional impact of monetary policy. Inequality should play a role in the BoE's considerations insofar as income and wealth inequality affect the transmission of fiscal policy.
Jagjit Chadha's picture Jagjit Chadha National Institute of Economic and Social Research No role Extremely confident
Inequality outcomes are a question are a question first for the politician who acts as the social arbiter on whether a particular outcome is acceptable or not. And then becomes a question for the Treasury in terms of changing the tax/benefit system. The central bank is charged with price and financial stability and cannot really trade these objectives for ones of reducing inequality. It neither has the tools nor the experience to do so.
Jumana Saleheen's picture Jumana Saleheen CRU Group Minimal role Confident
Monetary policy has a clear mandate which is to deliver price stability. If that objective can be achieved alongside lowering inequality (at no extra cost) then it should be done. However, the only way to find out if that is possible, is for central banks to study the impact of monetary policy decisions on inequality. There is compelling evidence that QE raises inequality - by benefiting the rich (who hold financial assets) relative to the poor. Given QE is a relatively new policy tool, evaluating its potential 'unintended consequences' should be mandatory. These evaluations will be critical to a broader public understanding of the pros and cons of QE, and how well it is aligned to the governments broader policy agenda.
Martin Ellison's picture Martin Ellison University of Oxford Minimal role Very confident
Panicos Demetriades's picture Panicos Demetriades University of Leicester No role Extremely confident
If monetary policy includes inequality in its remit, that will make the mandate of the central bank muddled, which could de anchor inflation expectations. The fewer the objectives of monetary policy, the easier it is to achieve them and to maintain clarity and transparency of the policy process. In fact, if you are to expand the remit, why stop at inequality, you can also add the environment, jobs and much more besides, all of which would almost certainly interfere with delivering on price stability! That does not mean that central banks shouldn’t attempt to analyse any effects of their policies on inequality. They should understand all the unintended consequences of their policies.
Nicholas Oulton's picture Nicholas Oulton London School of Economics No role Very confident
There is already pressure to include climate change in monetary policy decisions. Should anything be left out? How about making race or gender equity one of the goals of monetary policy? Or should crushing China be on the list too? Pretty soon any chance of an intellectually consistent framework under which a central bank could be held democratically accountable for its success or failure disapperars.
David Cobham's picture David Cobham Heriot Watt University Minimal role Confident
While we would all like to see the end of exceptionally low interest rates and QE, it's far from obvious what the effect of moving quickly to such a world would be on inequality. The BoE could make a much more useful contribution by arguing in private and in public against the reintroduction of austerity on which part of the present government seems bent, since the short term and long term results of that would be unequivocally negative for equality.
Paul De Grauwe's picture Paul De Grauwe London School of Economics Minimal role Confident
Roger Farmer's picture Roger Farmer University of Warwick No role Very confident
The MPC is unelected. If the Bank becomes involved in highly politicized decisions including, but not limited to, asset purchases designed to redistribute income and wealth, there is a danger of losing the current political consensus for Bank independence. I am strongly opposed to extending its current mandate.
Michael McMahon's picture Michael McMahon University of Oxford Minimal role Confident
To the extent that inequality changes the transmission of policy or shocks to the economy, it is important for monetary policymakers to be aware of developments including those that come from its own past actions. Should the central bank try to affect inequality directly? I don't think so. The central bank does not have good tools to deal with inequality; fiscal policy can be more targeted and it is important that the objectives of redistributive policies reflect the preferences of the electorate.
Federica Romei University of Oxford Minimal role Very confident
I would prefer the fiscal authority to tackle income and wealth inequality.
David Miles's picture David Miles Imperial College No role Confident
Since there is no clear and consistent evidence of effects that in itself is an argument for it playing little role in policy making. Furthermore there are more direct and powerful tools - the tax and benefit system and the structure of public spending - to influence the distrubtion of income and wealth.
Wouter Den Haan's picture Wouter Den Haan London School of Economics Minimal role Confident
Since we still do not quite understand the role of monetary policy on inequality very well, it doesn't make sense to give it a substantive role. Nevertheless, I would think it important that policy makers stay alert to the consequences of their actions on this very important economic indicator.
Patrick Minford's picture Patrick Minford Cardiff Business School No role Extremely confident
See first answer. Monetary policy should focus on its role as a stabiliser and long run setter of the price level. It has no other role. Redistribution to reduce inequality is the role of the government through tax/benefit policy.
Chryssi Giannitsarou's picture Chryssi Giannitsarou University of Cambridge, Faculty of Economics Minimal role Not confident
Wendy Carlin's picture Wendy Carlin University College London Substantive role Confident
By this answer, I mean that CBs should be improving their understanding of the determinants of changes in income and wealth inequality in order to understand better the nature of business and financial cycles, and to learn about how their decisions in line with their existing mandates affect outcomes for inequality.
Gino A. Gancia's picture Gino A. Gancia Queen Mary University of London Minimal role Confident
Sir Charles Bean's picture Sir Charles Bean London School of Economics No role Extremely confident
Distributional issues are at the heart of politics and distributional questions should be decided by politicians not the unelected technocrats who staff central bank policy committees. If the distributional consequences of meeting the central bank's policy objectives (monetary and financial stability) are unacceptable, then in the first instance the government should use its fiscal tools to offset them. In the UK context, if the Chancellor were unhappy with the distributional consequences of setting monetary policy at the level necessary to meet the inflation target then he could also choose to exercise his override option. But in that case it would be clear that the decision was being made to 'aim off' the inflation target for distributional reasons and the responsibility for that decision lay with the political rather than the monetary authorities.
John VanReenen's picture John VanReenen London School of Economics Minimal role Confident
Morten Ravn's picture Morten Ravn University College London Substantive role Very confident
Inequality concerns should be on the table. But as indicated in my previous answer, monetary policy has to work in tandem with other policy instruments and primary concern should probably still be to provide a nominal anchor for the economy. Yet, it should be one of the issues discussed when determining the stance of monetary policy.
Michael Wickens's picture Michael Wickens Cardiff Business School & University of York Substantive role Very confident
Considerations of inequality should not influence current inflation targeting policy via interest rates. This is not the case for QE which currently avoids distorting after tax income at the expense of greatly distorting wealth.
Linda Yueh's picture Linda Yueh London Business School Minimal role Not confident
Costas Milas's picture Costas Milas University of Liverpool Minimal role Confident
The Bank’s main aim is to defend price stability. The Bank of England is not “Bob the Builder” to fix it all. In an earlier CFM survey, quite a few of us suggested that Central Banks should purchase “green bonds” as an environmental-friendly policy. To also provide Central Banks with the task of influencing income inequality might be a big ask.
Ricardo Reis's picture Ricardo Reis London School of Economics Substantive role Very confident
Kate Barker's picture Kate Barker British Coal Staff Superannuation Scheme and University Superannuation Scheme Minimal role Confident
Natalie Chen's picture Natalie Chen University of Warwick Minimal role Not confident
Simon Wren-Lewis's picture Simon Wren-Lewis University of Oxford Minimal role Confident
Lucio Sarno's picture Lucio Sarno Cambridge University No role Confident