As a tool that is primarily aimed at tackling cyclical fluctuations, monetary policy is unlikely to be a substantial driver of structural inequality. We know that downturns can lay bare the different types of inequality that are lurking beneath – as I mentioned above – but, the sources of inequality run deeper and, I believe, are more structural in nature than they are cyclical.
But this does not mean that, as monetary policy makers, we should ignore it. This was one of the key messages we heard from the general public and representative groups when we conducted our own ‘listening exercises’ as part of the ECB’s 2021 strategy review.