Macroeconomics and income distribution: the distributive impacts of monetary policy

• Grant number: 24/00274-8
• Support Opportunities: Regular Research Grants
• Start date: August 01, 2024
• End date: July 31, 2026
• Field of knowledge: Applied Social Sciences - Economics - Economic Theory
• Principal Investigator: Lílian Nogueira Rolim
• Grantee: Lílian Nogueira Rolim
• Host Institution: Instituto de Economia (IE). Universidade Estadual de Campinas (UNICAMP). Campinas , SP, Brazil
• Associated researchers: Carolina Troncoso Baltar ; Rosangela Ballini

Abstract

The purpose of this research is to investigate the distributional impacts of monetary policy from different channels that relate macroeconomics and income distribution. In methodological terms, the research will use agent-based models. This methodology uses computer simulations and presents itself as a robust modeling strategy for the analysis of complex systems. The research will make use of the model developed by Rolim (2022), implementing changes that make the model structure more robust and suitable for the proposed research. Based on the new structure of the model, it will be used to investigate two specific research questions inspired by post-Keynesian literature. The first stage will investigate the relationship between income distribution and inflation to evaluate the robustness of the post-keynesian conflict inflation theory in a model with microfoundations. The second stage aims to investigate whether alternative monetary policy rules to the inflation targeting regime can help to reduce income inequality. (AU)