Journal of money credit and banking· 2026Q1
Unconventional but Different After All? A Unified Series of Narrative Monetary Policy Shocks a
- 0citations
- Q1SCImago
- 2026year
Short summary
Unconventional monetary policy shocks widen wealth inequality, unlike conventional easing which reduces it, by disproportionately boosting stock prices over house prices.
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Key points
- Unified series of conventional and unconventional monetary policy shocks created for the U.S.
- Aggregate peak responses to monetary policy shocks are statistically similar across conventional and unconventional regimes.
- Wealth inequality responses differ: expansionary unconventional shocks increase it, while conventional easing decreases it.
- Unconventional policy's impact on wealth inequality is driven by stock prices rising more than house prices.
AI-generated from the title and abstract; the full text is not read.
Abstract
Abstract We construct a unified series of narrative monetary policy shocks for the United States that spans both conventional and unconventional policy episodes, combining Romer and Romer's identification with Wu and Xia's shadow rate. The methodological consistency across regimes allows us to formally test whether monetary policy transmission differs at the zero lower bound. Structural‐break tests cannot reject equality of aggregate peak responses, but strongly reject it for wealth inequality. Expansionary unconventional shocks increase wealth inequality—the opposite of conventional easing—because stock prices rise disproportionately relative to house prices, benefiting equity‐heavy households at the top of the distribution.
The authors' abstract, as published at the source. Journal of money credit and banking, 2026 · DOI ↗
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General Economics, Econometrics and FinanceEconomics, Econometrics and Finance