Assessing the impact of Quantitative Easing on Inequality in the US

The Great Recession has had a great impact on inequality in the US, it further increased the already high income and wealth inequality levels. The crisis has also affected the US policy framework: in order to relaunch the economy, extraordinary policies were enforced. Some of them, such as the Quantitative Easing program, are claimed to further increase inequality. This paper investigates the relationship between the unconventional monetary policies implemented by the Federal Reserve, in particular the Quantitative Easing program, and inequality. In order to offer a broad analysis, the paper considers four different dimensions of inequality: income, salary, non-durable consumption and total expenditures. It uses micro level data from the Consumer Expenditures Survey to calculate quarterly Gini coefficients from 2004 to 2016. The vector autoregression models designed to study the effects of unconventional monetary policy present two main results. Quantitative Easing has had a positive impact on income inequality, leading to a temporary higher Gini coefficient, but it has had a non statistically significant impact on consumption.