Prudent monetary policy and the well-being of the poor: A study of the United States

This paper attempts to find some correlation between monetary policy and its consequential effects on the poor. Our paper may be considered to be an extension of Romer and Romer’s article "Monetary Policy and the Well-Being of the Poor" presented at the Federal Reserve Bank of Kansas City 1998 symposium "Income Inequality: Issues and Policy Options." We focus specifically on some relatively short run effects of monetary policy, and even then, exclusively on the poor. Our hypothesis is simple: prudent monetary policy makes the poor better off.