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Monetary policy and functional income distribution, 1875-2010

Ontaneda Navarrete, David LU (2016) EKHM52 20161
Department of Economic History
Abstract
This paper examines the existence of a link between changes in monetary policy and changes in functional income distribution using a panel of up to fourteen countries over the period 1875-2010. It also investigates the potential transmission channels (changes in asset prices, wages, unemployment, and inflation) that explain such a phenomenon. The evidence indicates the presence of a correlation between monetary policy and functional income distribution over the whole period of analysis that is robust across different estimation methods. The effect of monetary policy is not factor biased as its relationship with the capital share of the total economy has changed over time. Indeed, in some periods monetary policy indicators (short-term... (More)
This paper examines the existence of a link between changes in monetary policy and changes in functional income distribution using a panel of up to fourteen countries over the period 1875-2010. It also investigates the potential transmission channels (changes in asset prices, wages, unemployment, and inflation) that explain such a phenomenon. The evidence indicates the presence of a correlation between monetary policy and functional income distribution over the whole period of analysis that is robust across different estimation methods. The effect of monetary policy is not factor biased as its relationship with the capital share of the total economy has changed over time. Indeed, in some periods monetary policy indicators (short-term interest rates and deviations from a monetary policy rule) are correlated with more income being allocated as capital income, where as in others they are associated with a lower capital share. (Less)
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author
Ontaneda Navarrete, David LU
supervisor
organization
course
EKHM52 20161
year
type
H2 - Master's Degree (Two Years)
subject
keywords
income distribution, capital share, monetary policy, interest rate
language
English
id
8880726
date added to LUP
2016-06-20 13:10:31
date last changed
2016-06-20 13:10:31
@misc{8880726,
  abstract     = {This paper examines the existence of a link between changes in monetary policy and changes in functional income distribution using a panel of up to fourteen countries over the period 1875-2010. It also investigates the potential transmission channels (changes in asset prices, wages, unemployment, and inflation) that explain such a phenomenon. The evidence indicates the presence of a correlation between monetary policy and functional income distribution over the whole period of analysis that is robust across different estimation methods. The effect of monetary policy is not factor biased as its relationship with the capital share of the total economy has changed over time. Indeed, in some periods monetary policy indicators (short-term interest rates and deviations from a monetary policy rule) are correlated with more income being allocated as capital income, where as in others they are associated with a lower capital share.},
  author       = {Ontaneda Navarrete, David},
  keyword      = {income distribution,capital share,monetary policy,interest rate},
  language     = {eng},
  note         = {Student Paper},
  title        = {Monetary policy and functional income distribution, 1875-2010},
  year         = {2016},
}