All public policy is re-distributional and monetary policy is no exception. Relative winners have included debtors, whose borrowing costs have collapsed. Relative losers are likely to have included savers reliant on bank deposits for income, due to falling bank deposit rates. Studies have tended to confirm that distributional pattern (McKinsey Global Institute (2013)). 2  BIS central bankers’ speeches  But these relativities need to be seen against the backcloth of a rising, not retreating, income and wealth tide. The majority of people – savers and borrowers, old and young – appear to have been made better off absolutely as a result of extraordinary monetary measures. For what it is worth, the Bank’s own research points firmly in that direction (Bank of England (2012)). Of course, some of the losses may be more visible than the gains and some of the relative losers more audible than the gainers. For example, low yields have reduced annuity rates for some pensioners, lowering income streams. But those same low yields have boosted asset prices, raising the value of pension pots. The net effect appears on average to have been positive. And extra-ordinary monetary measures will of course not last forever. When they unwind, so too will any distributional effects. In others words, central banks’ influence on income and wealth shares is likely to be temporary. Yet even if, over the medium-term, central banks cannot influence inequality, the reverse may not be true.
The Spanish economy The weakening of the international economy and the loss of buoyancy in the European economy contributed in 2001 to prolonging the gradual slowdown in activity in Spain in train since the previous year, when the first symptoms of the previous lengthy expansionary phase having run its course were discerned. Consumption and investment in construction were the main underpinnings of growth in our economy, while productive investment and exports were the chief components dampening it. That said, GDP increased by 2.8% in 2001, clearly above the figure of 1.5% posted in the euro area. The maintenance of high job creation rates during 2001, set against the slowing trend marked by general developments in the economy, and the favourable financial conditions in place contributed to sustaining household income and helped underpin consumer spending and residential investment. However, the declining course of investment in capital goods steepened in the face of heightening uncertainty, worsening expectations and slowing final demand, which the generous financial conditions were unable to offset. The effects on activity were reinforced by the fall in the growth rate of exports as from the early months of 2001.