<abstract xmlns="http://www.w3.org/1999/xhtml">
<p>Inequality is a challenging issue for all developing countries across the globe. Evaluating the role of monetary policy in mitigating inequality is imperative for researchers and policy makers. The central objective of the present study is to empirically evaluate the impact of monetary policy on income inequality for ten Asian and African developing economies from 1990–2020. The methods of pooled mean group (PMG)/panel autoregressive distributed lag (ARDL), and fully modified least square (FMOLS) are implemented. The empirical results indicate that money supply has negative, and inflation has a positive and significant influence on income inequality. It has also been found that GDP per capita income and inward foreign direct investment (FDI) have a negative impact on inequality. The findings of the present study recommend that money supply, per capita income, and inward FDI should be enhanced, while inflation must be controlled using coordinated fiscal and monetary policies.</p>
</abstract>

Inequality is a challenging issue for all developing countries across the globe. Evaluating the role of monetary policy in mitigating inequality is imperative for researchers and policy makers. The central objective of the present study is to empirically evaluate the impact of monetary policy on income inequality for ten Asian and African developing economies from 1990–2020. The methods of pooled mean group (PMG)/panel autoregressive distributed lag (ARDL), and fully modified least square (FMOLS) are implemented. The empirical results indicate that money supply has negative, and inflation has a positive and significant influence on income inequality. It has also been found that GDP per capita income and inward foreign direct investment (FDI) have a negative impact on inequality. The findings of the present study recommend that money supply, per capita income, and inward FDI should be enhanced, while inflation must be controlled using coordinated fiscal and monetary policies.

The Effect of Monetary Policy on Income Inequality: Empirical Evidence from Asian and African Developing Economies

Department of Economics, Faculty of Business and Economics

Department of Economics, Faculty of Business & Economics

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution 4.0 International License.

Inequality is a challenging issue for all developing countries across the globe. Evaluating the role of monetary policy in mitigating inequality is imperative...

The Effect of Monetary Policy on Income Inequality: Empirical Evidence from Asian and African Developing Economies

Published Online: Sep 05, 2023

Page range: 133 - 158

Received: Aug 17, 2022

Accepted: Feb 23, 2023

DOI: https://doi.org/10.2478/jcbtp-2023-0028

Keywords
Monetary policy, income inequality, panel ARDL, Asian and African countries

© 2023 Zulfiqar Khan et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

The Effect of Monetary Policy on Income Inequality: Empirical Evidence from Asian and African Developing Economies

Published Online: Sep 05, 2023

Page range: 133 - 158

Received: Aug 17, 2022

Accepted: Feb 23, 2023

DOI: https://doi.org/10.2478/jcbtp-2023-0028

KeywordsMonetary policy, income inequality, panel ARDL, Asian and African countries

© 2023 Zulfiqar Khan et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
Monetary policy, income inequality, panel ARDL, Asian and African countries