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Working Papers
How Dovish Monetary Policy Fuels Inequality [Job Market Paper]
Empirical evidence shows that expansionary monetary policy can widen income inequality. Using a dataset with improved coverage of high-income households, this study shows that although the labor-income Gini declines following monetary easing, the total-income Gini increases due to a widening gap in financial income. This divergence reflects differences in household income sources and asset composition: top households earn a large share of income from risky financial assets that benefit from monetary easing, while bottom households rely primarily on labor income and hold interest-bearing assets whose returns fall when interest rates decline. To explain this pattern, I develop a modified two-agent New Keynesian framework that incorporates a financial accelerator mechanism. In this framework, risk-taking top households borrow deposits of bottom households as external finance through banks, so that monetary easing lowers the price of risk-taking—the lending spread—and redistributes financial income toward the top. As a result, the model can replicate the opposite impulse responses of the two Gini coefficients, consistent with the empirical findings. It highlights the importance of the financial income channel in understanding the redistributive effects of monetary policy.
Key words: Monetary policy, Inequality, Financial income
JEL Classification: E52, E44, D63
Property Tax and Housing Wealth Inequality [R&R at Macroeconomic Dynamics ]
This paper examines how property taxation shapes housing wealth inequality. A simple model shows that higher property taxes can worsen inequality by reducing homeownership, while progressive taxes shift burdens toward high-value properties and mitigate this effect. Extending to a heterogeneous-agent model, I find that housing supply elasticity is crucial: inelastic markets allow tax-induced price changes to expand homeownership and reduce inequality. Lump-sum transfers from tax revenue also influence inequality through a similar channel, highlighting the joint role of tax design and general equilibrium forces.
Key words: Wealth Inequality, Property Tax, General Equilibrium Effect, Progressive Taxation
JEL Classification: E62, R21, R31
Publications
"Effects of Monetary Policy on the Wealth Inequality", Economics Letters, Volume 255, 2025
This paper examines the effect of monetary policy on wealth inequality in the United States using quarterly data from the Distributional Financial Accounts. I construct a Gini coefficient across five wealth groups and analyze its response to high-frequency-identified monetary shocks. Results suggest contractionary policy modestly reduces wealth inequality via lower equity values, but this effect is statistically insignificant and offset by reallocation toward interest-bearing assets. Real assets, such as housing, play a limited role in shaping these distributional dynamics.
Keywords: Monetary policy, Wealth inequality, Asset Portfolio
JEL: E52, E44, D63
Work in Progress
Low Fertility and the Flattening of Women’s M-Curve: A Quantitative Life-Cycle Analysis(with Eunseong Ma)
Effects of Monetary Policy on the Distribution of House Prices
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