The impact of monetary and tax policy on income inequality in Japan

Farhad Taghi Zadeh Hesary, Naoyuki Yoshino, Sayoko Shimizu

    研究成果: Article査読

    10 被引用数 (Scopus)


    This paper assesses the effects of the most recent monetary policy behaviour of the Bank of Japan (in particular, zero interest rate policy and negative interest rate policy) and Japanese tax policy on income inequality in this country during the period of 2002Q1 to 2017Q3. The vector error correction model (VECM) that develops in this research shows that increase in money stock (m1) through Quantitative Easing (QE) and Quantitative and Qualitative Easing (QQE) policies of the BOJ significantly increases the income inequality. On the contrary, Japanese tax policy was effective in reducing the income inequality. Variance decomposition results show that increasing of income inequality by monetary policy is larger when comparing to decreasing effects of tax policy on income inequality. Cointegration and VECM results show that monetary policy has both short-run and long-run impacts but for tax policy paper could not find any significant short-run impact on income inequality. In addition, paper found that technological progress only in long-run can reduce the income inequality by increasing the marginal productivity of labour with positive impacts on employment and wages.

    ジャーナルWorld Economy
    出版ステータスPublished - 2019 1月 1

    ASJC Scopus subject areas

    • 会計
    • 財務
    • 経済学、計量経済学
    • 政治学と国際関係論


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