As it reduces marginal propensity to consume, inequality weakens the channels of monetary policy transmission onto aggregate demand. At the same time, low-income sectors face increased restrictions in access to credit, even at lower interest rates. Finally, trade-offs that may pose dilemmas in monetary policy have also been highlighted.
In particular, although the rate reduction may have a positive impact on aggregate demand and employment, and therefore, reduce inequality, it also leads to an increase in the price of assets which are generally held by the wealthiest sectors, thus increasing inequality. Focusing on emerging countries, we have discussed the limits that a hierarchy of currencies at a global level imposes on central banks.