Central Bankers Can Do More Than Just Care about Economic Inequality

By Karen Petrou

  • New evidence reinforces monetary policy’s distributional impact.
  • Monetary policy can also be redesigned to ensure that its distributional impact enhances equality instead of – as now – making it worse.
  • More evidence also reinforces the link between unequal monetary policy and slow growth.
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Pick Your Poison: Abandoning Regulated Banking in Search of Financial Inclusion

By Karen Petrou

  • Transaction and savings accounts are critical to financial security and inter-generational economic equality.
  • Nonbank offerings might increase financial inclusion, but pose risks to safeguarding savings, personal privacy, and consumer protection unless or until consumer-finance standards symmetrically apply to banks and nonbanks offering like-kind products to vulnerable households.
  • Public-utility, postal, or CBDC alternatives to bank accounts are a long way off and may not effectively safeguard high-risk households. 
  • Expanding low-cost, no-risk bank accounts is a critical near-term policy option.
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