entity

European Central Bank

Also known as: ECB

Facts (12)

Sources

The impact of monetary policy on income and wealth inequality cepr.org VoxEU Feb 11, 2022 11 facts

measurementReducing the European Central Bank's key policy rate by 25 basis points increases GDP in Finland by approximately 1% within a two-year horizon.

claimThe European Central Bank introduced large-scale securities purchase programs following the 2008–2013 financial and debt crisis, and continued these programs during the COVID-19 crisis, to support price stability and economic growth.

claimA 25 basis point reduction in the European Central Bank (ECB) policy rate lowers the unemployment rate and increases gross income across all income quintiles.

measurementThe study analyzes the impact of a 25 basis point European Central Bank (ECB) policy rate reduction on Finnish macroeconomic variables, measured two years after the reduction.

claimLowering the European Central Bank's key policy rate by 25 basis points reduces unemployment and increases gross income within every income group in Finland.

claimThe authors found no major differences between the macroeconomic impact of the European Central Bank's key policy rate reduction and its securities purchase programmes.

claimWhile the European Central Bank's accommodative monetary policy has had a significant impact on economic growth in the euro area, the resulting changes in income and wealth disparities have been small on average.

referenceThe effects of the European Central Bank's monetary policy on economic growth and inflation in Finland are similar to those reported for large euro area member states by Lenza and Slacalek (2021).

measurementFollowing a 25 basis point reduction in the European Central Bank's key policy rate, unemployment declines most in the bottom income quintile in Finland, while gross income grows most in the upper income quintiles due to nominal wage increases.

claimMonetary stimulus from the European Central Bank raises both housing and stock prices in Finland, with effects clearly larger on the stock market than the housing market.

claimAs a result of a European Central Bank policy rate decrease, net wealth increases the most in the second-poorest quintile of Finnish households because these households often have significant housing wealth but also large mortgages, and the nominal value of their debt remains constant.

What Are the Key Macroeconomic Indicators? | IG International ig.com IG 1 fact

referenceKey Eurozone economic indicators include Interest rates (European Central Bank, Quarterly), GDP growth rates (Eurostat, Quarterly), Balance of trade (Eurostat, Monthly), Consumer confidence (Eurostat, Monthly), Unemployment rate (Eurostat, Monthly), Euro Area Consumer Price Index (Eurostat, Monthly), and Retail sales (Eurostat, Monthly).