If anything, changing monetary policy exacerbates inequality
Vereckey 21 – editor, citing Zeti Aziz, former governor of Bank Negara Malaysia
Betsy Vereckey, “Should central banks address inequality? Experts weigh in,” MIT Sloan School of Management, 8-3-21, https://mitsloan.mit.edu/ideas-made-to-matter/should-central-banks-address-inequality-experts-weigh
How do interest rates affect inequality?
Some argue that low interest rates increase asset prices, which benefits asset holders and the economy, while others say that low interest rates help the lower end of the income distribution by changing unemployment dynamics and boosting growth to the economy.
Zeti noted that when interest rates are low and the stock market is doing well, “this creates wealth for the higher-income groups that own stocks and shares and that have stakes in large corporations and in the financial services.”
It also contributes to increased disparity among poorer individuals and the unbanked. There is “a linkage between highly accommodative monetary policy and more pronounced income inequality,” she said.