Next March 26, Louis-Philippe Rochon (Laurentian University) will present a paper titled “Monetary Policy and its Effect on Income Distribution” within the framework of Seminars on Economics organized by the Economic Research Deputy General Management Office headed by Germán Feldman. This seminar is given along with a range of actions that the BCRA has taken to strengthen its academic profile since the beginning of 2020.
The presentation will be available in the seminar´s history and on the YouTube channel of the BCRA. Subscribe for update alerts.
Abstract: The difference between what people believe central banks do and what central banks actually do is huge. The same happens if we compare the outcome monetary policy is believed to achieve and what it actually achieves. This paper argues that—contrary to the mainstream theory—within a framework of inflation targeting, monetary policy consists in regulating income distribution through two channels (income and wealth), rather than fine-tuning economic activities in order to reach a specific inflation target and a natural interest rate. This view is based on the idea that a monetary policy focused on inflation targeting is ineffective. It should rather be deemed as an income policy in favor of the rentier class. We also discuss if this approach can be applied to emerging economies that face other economic challenges.
Louis-Philippe Rochon has a PhD from the New School for Social Research (1998), and obtained the Frieda Wunderlich Award for Outstanding Dissertation for his presentation on endogenous money and post-Keynesian economics. At present, he is a full professor of Economics at Laurentian University, Canada. He is chief editor of Review of Political Economy (ROPE), and has published more than 150 papers on academic journals, and has edited or published around 30 books.
March 19, 2021.