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Working Papers
How Dovish Monetary Policy Fuels Inequality [Job Market Paper]
This paper examines how expansionary monetary policy affects income inequality in the United States. While previous studies focus on heterogeneity introduced through uninsured income risk and treat the financial sector only as a secondary channel, this paper highlights that the bottom and top differ in their income composition and emphasizes the role of changes in financial income as a key transmission channel. Using high-frequency-identified monetary shocks and Gini coefficients constructed from binned data, I find that monetary easing reduces labor income inequality but increases total income inequality, largely due to the stronger response of financial income relative to labor income. To interpret these empirical findings, I develop a Two-Agent New Keynesian model augmented with a financial accelerator. The model reproduces the differential responses of labor earnings and total income inequality to monetary shocks. Bayesian estimation reveals that monetary policy shocks explain a non-trivial share of observed inequality dynamics. A counterfactual analysis of the COVID-19 episodes suggests that an accommodative monetary stance may have unintentionally exacerbated inequality.
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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