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Research Paper Bank of England Staff Working Papers 880

Has monetary policy made you happier?

Authors

Publication date

10 Jul 2020

Summary

Concerns were raised about the distributional impact of the loosening in UK monetary policy following the financial crisis. We assess the impact of this loosening on well-being using household-level data and estimated utility functions. The welfare benefits are found to have been positive, in aggregate and across most of the household distribution, relative to what otherwise would have happened. They are significantly larger than when looking at financial factors alone due to the non-financial benefits of lower unemployment and financial distress. Most people were made better-off in welfare terms from the monetary loosening, rich and poor, although the young have benefited more than the old.

Subjects

Households, Economics, Well Being, Finance, and Economic Policy

Links

https://www.bankofengland.co.uk/working-paper/2020/has-monetary-policy-made-you-happier

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