Monetary policy & Wealth inequality

Abstract

This research aims to prove that Quantitative Easing has not been an effective monetary policy instrument of the European Central Bank, while increasing wealth inequality as a side effect in the Eurozone. It makes an assessment of the (historical) context in which the European Central Bank operates, together with a description of indirect and direct causes of Quantitative Easing policy. Furthermore, Quantitative Easing policy itself is described, followed by an assessment of economic theories and concepts of relevance for a better understanding of the consequences of Quantitative Easing policy. The relation between Quantitative Easing and (increasing) wealth inequality is also discussed within the context of theoretical and empirical literature. A collection of secondary data is presented and discussed in order to prove the central claim of the research. The research concludes by proving that Quantitative Easing has not been a very effective monetary policy instrument of the ECB, and that it has increased wealth inequality in the Eurozone.