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ECB monetary policy could temporarily ease inequality in Europe

Monetary policy measures can improve welfare, contribute to reducing income disparities

Reuters  |  Frankfurt 

Representative image
Representative image

The European Central Bank's ultra-easy monetary may actually reduce inequality in Europe, Vice President Vitor said on Tuesday, rejecting the argument that asset buys disproportionately benefit the wealthy.

said the ECB's stimulus measures lower and thus increase disposable for Europe's poorest, compressing inequality, at least in the short term.

"This result confirms that, from the distributional perspective, the main impact of expansionary monetary policies is on the reduction of with positive effects on the reduction of inequality," said in Lisbon.

"(Monetary policy) measures can improve their welfare and contribute toward reducing disparities, at least in the short-term."

But he added that such steps are likely to be temporary with the "hollowing out of the middle class" and the increasing polarisation of incomes likely continuing over the longer term.

First Published: Tue, August 22 2017. 20:43 IST
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