ECB Research: ECB's bond-buying may have cut income inequality, but only a bit

A fresh research conducted by the European Central Bank (ECB) economists showed that the central bank’s EUR 2.6 trillion assets purchase scheme may have reduced income inequality, putting at rest the dispute that claims the lavish stimulus mainly benefited the wealthiest of households.

The paper argued, “The reduction in unemployment and in income inequality is particularly marked in those countries, such as Spain, where the initial unemployment rate is higher. The effect can mostly be ascribed to the disproportionately large drop in the unemployment rate of low-income households.”

The paper, published by the ECB as a “Discussion Paper”, added: “The overall effects of monetary policy on income inequality are modest, compared to its observed secular trend. “Monetary policy in recent years benefited most households and did not contribute to an increase in wealth, income or consumption inequality.”