Farhad Taghizadeh‐Hesary, N. Yoshino, E. Rasoulinezhad
{"title":"Unconventional monetary policy and income disparity in an aging society","authors":"Farhad Taghizadeh‐Hesary, N. Yoshino, E. Rasoulinezhad","doi":"10.1080/17487870.2021.1968860","DOIUrl":null,"url":null,"abstract":"ABSTRACT The main objective of the Bank of Japan’s monetary policy is inflation targeting; however, it may be associated with the recently increased income disparity in Japan. Using the autoregressive distributed lag (ARDL) estimation model, this study conducted in the context of an aging society revealed that the bank’s monetary policy increased income inequality through increased financial asset prices, resulting in a widening of the income gap. We also find that in the long run, the aging population will increase income disparity in Japan; however, tax policy will partially mitigate the adverse effect on income inequality. Unconventional monetary policy will not bring a desirable result for the Japanese economy and the nation as a whole. In addition, the government needs to revise the incremental tax system so that wealthier groups pay more tax than before. In addition, expanding the tax system by adopting the carbon taxation scheme would be beneficial. The government with this kind of tax can pursue two major goals: reducing poverty and environmental pollution, which are ongoing challenges in Japan.","PeriodicalId":51737,"journal":{"name":"Journal of Economic Policy Reform","volume":"25 1","pages":"451 - 470"},"PeriodicalIF":3.3000,"publicationDate":"2021-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"8","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economic Policy Reform","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1080/17487870.2021.1968860","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"DEVELOPMENT STUDIES","Score":null,"Total":0}
引用次数: 8
Abstract
ABSTRACT The main objective of the Bank of Japan’s monetary policy is inflation targeting; however, it may be associated with the recently increased income disparity in Japan. Using the autoregressive distributed lag (ARDL) estimation model, this study conducted in the context of an aging society revealed that the bank’s monetary policy increased income inequality through increased financial asset prices, resulting in a widening of the income gap. We also find that in the long run, the aging population will increase income disparity in Japan; however, tax policy will partially mitigate the adverse effect on income inequality. Unconventional monetary policy will not bring a desirable result for the Japanese economy and the nation as a whole. In addition, the government needs to revise the incremental tax system so that wealthier groups pay more tax than before. In addition, expanding the tax system by adopting the carbon taxation scheme would be beneficial. The government with this kind of tax can pursue two major goals: reducing poverty and environmental pollution, which are ongoing challenges in Japan.
期刊介绍:
The Journal of Economic Policy Reform focuses on the analysis of economic policy reform. The journal draws upon what lessons can be learned from the successes and failures of countries undertaking reforms and how existing theories can be developed to shed light on positive as well as normative aspects of the reform process. The Journal of Economic Policy Reform encourages work from economists and political economy analysts on policies to promote growth and reduce poverty, intellectual property rights, aid versus trade, debt and debt relief, taxation and social security systems, surveys of key reform issues, as well as on corruption, democracy, emerging markets and the role of multilateral institutions.