Exploring the dynamic shock of unconventional monetary policy channels on income inequality: a panel VAR approach

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dc.contributor.authorZungu, Lindokuhle
dc.contributor.authorGreyling, Lorraine
dc.coverageBasel, Switzerland
dc.coverage.conferenceissn
dc.date.accessioned2026-01-13T08:43:33Z
dc.date.available2026-01-13T08:43:33Z
dc.date.issued2022
dc.departmentNameEconomics
dc.description.abstractIn response to the “Great Recession and Global Financial Crisis”, central banks had to deploy unconventional monetary policies (UMP) in order to fight the severe impact of the crisis. Therefore, the purpose of this study is to examine the dynamic shock of unconventional monetary policies through earning heterogeneity, income composition, and portfolio channels on income inequality in emerging economies covering the period 2000–2019, using the panel vector autoregressive (PVAR) model. A PVAR model was designed for this study because of its ability to address the dynamics of numerous entities considered in parallel. The findings suggest that the UMPs used by these countries’ central banks may have increased income inequality through all of the channels investigated in this study, as a shock to unconventional monetary policy results in a positive response in income inequality. Even when pre-tax income, held by the top 10%, is adopted to measure income inequality, the study yields similar results. It is evident that a central bank’s objective is and should be to fulfil its mandate of achieving maximum employment and price stability, thus bringing wide economic benefits. Thus, some forms of policies are more appropriate for addressing concerns about inequality (income policy or fiscal policy) than others. However, the current study alerts the central bank to the fact that monetary policies may have a wounding impact on income inequality. Therefore, the central banks should consider the cost of monetary policies on income inequality when drafting or implementing these kinds of policies.
dc.facultyFaculty of Commerce, Administration and Law
dc.format.preprintNo
dc.identifier.citationZungu, L.T. and Greyling, L., 2022. Exploring the dynamic shock of unconventional monetary policy channels on income inequality: a panel VAR approach. Social Sciences, 11(8), pp.1-22.
dc.identifier.issn2076-0760 (online)
dc.identifier.otherhttps://doi.org/10.3390/ socsci11080369
dc.identifier.urihttp://hdl.handle.net/10530/58528
dc.inproceedingsissn
dc.issuenumber11 / 8
dc.keynoteissn
dc.language.isoen
dc.pages1 - 22
dc.peerreviewedYes
dc.publisherMDPI
dc.subjectEarning heterogeneity
dc.subjectEmerging market
dc.subjectIncome inequality
dc.subjectIncome composition
dc.subjectPortfolio composition
dc.subjectPanel vector autoregressive (PVAR)
dc.subjectUnconventional monetary policies (UMP)
dc.titleExploring the dynamic shock of unconventional monetary policy channels on income inequality: a panel VAR approach
dc.title.journalSocial Sciences
dc.typeJournal Article
dspace.entity.typePublication
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