Essays on Macroeconomic Policies and Redistribution

• Autores: Karen Davtyan
• Directores de la Tesis: Raúl Ramos Lobo (dir. tes.), Josep Lluís Carrión i Silvestre (dir. tes.)
• Lectura: En la Universitat de Barcelona ( España ) en 2016
• Idioma: inglés
• Tribunal Calificador de la Tesis: Cecilio Tamarit Escalona (presid.), Javier José Peréz García (secret.), Marek Jarocinski (voc.)
• Materias:
  • Ciencias económicas
    • Teoría económica
      • Teoría macroeconómica
• Enlaces
  • Tesis en acceso abierto en:  TDX  Dipòsit Digital de la UB 
• Resumen

  • The general objective of the doctoral thesis is to evaluate the distributive effects of macroeconomic policies. In particular, the thesis assesses the distributional impact of fiscal policy, conventional and unconventional monetary policies. The distributive effect of fiscal policy is examined by analyzing the interrelations among economic growth, income inequality, and fiscal performance based on the evidence from the Anglo-Saxon countries. These interrelations are analyzed jointly in a system by examining also transmission channels among them. All the variables are regarded as endogenous within the framework of the structural vector autoregression methodology. This allows exploring dynamic interactions among the variables and feedback effects on each other through impulse response functions. In addition, the thesis provides new evidence on interrelations among economic growth, income inequality, and fiscal performance by employing the longest possible consistently measured data on income inequality on a country basis. The obtained results show that there are differences in the obtained results for the countries. Particularly, income inequality has negative effect on economic growth in the case of the UK while its effect is positive in the cases of the USA and Canada. The increase in inequality worsens fiscal performance for all the countries. Government spending reduces income inequality in the UK but it raises inequality in the USA and Canada. In addition, the results also indicate that tax revenues generally raise income inequality in all the considered countries. Thus, the measures of the fiscal policy channel are important tools to consider in the design of the policies to decrease inequality. The academic literature generally views fiscal policy as a measure to address growing income inequality, which is a widespread concern nowadays. Although the income distribution could also be affected by monetary policy, the distributive effects of monetary policy have not broadly been discussed in the literature. Taking this into account, the thesis contributes to the discussion in this research area by evaluating the effect of monetary policy on income inequality. The distributional effect of monetary policy is estimated in the case of the USA, where the dynamics in income inequality has mainly been driven by the variation in the upper end of distribution since early 1980’s. Consequently, the thesis uses an inequality measure that represents the whole distribution of income. To identify a monetary policy shock, the thesis employs contemporaneous identification with ex-ante identified monetary policy shocks as well as log run identification. In particular, a cointegration relation has been determined among the considered variables and the vector error correction methodology has been applied for the identification of the monetary policy shock. The obtained results indicate that contractionary monetary policy decreases the overall income inequality in the country. These results could have important implications for the design of policies to reduce income inequality by giving more weight to monetary policy. In the wake of the global financial crisis, central banks have generally begun to implement unconventional monetary policy together with conventional policy measures. There are already numerous studies on the impact of unconventional monetary policy measures on financial market as well as on their macroeconomic effect. However, the distributive effect of unconventional monetary policy has not essentially been examined yet. The thesis fills this gap by evaluating the distributive impact of unconventional monetary policy in comparison with the distributional effect of conventional monetary policy. The distributional effects of conventional and unconventional monetary policies are evaluated for the USA. The distributive impact of conventional monetary policy is explored through contractionary policy shocks. At the same time, the distributional effect of unconventional monetary policy is studied via expansionary policy shocks. The obtained results indicate that conventional monetary policy reduces income inequality while unconventional monetary policy raises it. In particular, the distributive impact of conventional monetary policy is stronger. The results also show that the both conventional and unconventional monetary policies significantly affect the upper part of income distribution. While conventional monetary policy does not significantly affect the lower part of income distribution, unconventional monetary policy has still a significant impact on it. In addition, the implemented variance decomposition analysis assesses the relative importance of conventional and unconventional monetary policy shocks in the variation of Gini index of income inequality. The obtained results indicate that the unconventional monetary policy shock explains the higher share of the variation in Gini index than the conventional monetary policy shock.