IMPACT OF MONETARY AND FISCAL POLICIES ON INCOME INEQUALITY IN EUROPEAN MONETARY UNION

Year 2008, Volume: 16 Issue: 1&2, 79 - 90, 25.12.2008

İmre Ersoy Bilgehan Baykal Pınar Deniz

https://doi.org/10.29228/mjes.165

Abstract

The article investigates the relationship between ECB 's monetary policy, SGP constrained fiscal policies of EMU members, the growth levels and the members' social development pattern embodied as income distribution. Panel co integration analysis is employed for the period between 1999 and 2008 in search for the impact of economic and monetary unification of the first 12 EMU members on the increasing income inequality. The results of the empirical analysis show that both the monetary policy of ECB and the restrained fiscal policies of the EMU members have negative effects on income equality. The findings also suggest that growth has positive effect on income distribution but the pace ofGDP growth is declining in EMU.

Keywords: Monetary Policy, Fiscal Policy, Income Distribution, Models with Panel Data

Keywords

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IMPACT OF MONETARY AND FISCAL POLICIES ON INCOME INEQUALITY IN EUROPEAN MONETARY UNION

Abstract

The article investigates the relationship between ECB 's monetary policy,
SGP constrained fiscal policies of EMU members, the growth levels and the
members' social development pattern embodied as income distribution.
Panel co integration analysis is employed for the period between 1999 and
2008 in search for the impact of economic and monetary unification of the
first 12 EMU members on the increasing income inequality. The results of
the empirical analysis show that both the monetary policy of ECB and the
restrained fiscal policies of the EMU members have negative effects on
income equality. The findings also suggest that growth has positive effect on
income distribution but the pace ofGDP growth is declining in EMU.

Keywords

Monetary Policy, Fiscal Policy, Income Distribution, Models with Panel Data

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