Template-Type: ReDIF-Paper 1.0 
Title: For whom the bill tolls: redistributive consequences of a monetary-fiscal stimulus
Author-Name: Michał Brzoza-Brzezina 
Author-Name: Julia Jabłońska 
Author-Name: Marcin Kolasa 
Author-Name: Krzysztof Makarski 
Abstract: During the COVID-19 pandemic, governments in the euro area sharply increased spending, while the European Central Bank eased financing conditions. We use this episode to assess how such a concerted monetary-fiscal stimulus redistributes welfare between various age cohorts. Our assessment involves not only the income side of household balance sheets (mainly direct effects of transfers), but also the more obscure financing side that, to a substantial degree, occurred via indirect effects (with a prominent role of the inflation tax). Using a quantitative life-cycle model, we document that young households benefited from the stimulus, while the bill was mainly paid by middle-aged and older agents. Crucially, most welfare redistribution was due to indirect effects related to macroeconomic adjustment that resulted from the stimulus. As a consequence, even though all age cohorts received significant transfers, welfare of some actually decreased
Number: 2024-097
Length: 51 pages 
Creation-Date: 2024-02
Keywords: COVID-19, Fiscal expansion, Monetary policy, Redistribution
Classification-JEL: E31, E51, E52, H5, J11
File-URL: https://hdl.handle.net/20.500.12182/1214
File-Format: Application/pdf
DOI: 10.33119/kaewps2024097
Handle: RePEc:sgh:kaewps:2024097