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Recently, considerable research effort has been devoted to studying the impact of monetary policy on inequality. This paper summarizes the literature on the causes of rising inequality and looks at the empirical work on interest rates and inequality. It argues that growing empirical evidence concerning the impact of monetary policy on inequality is mixed and that the conflicting results concerning monetary policy and inequality involve, to a large extent, how one measures inequality. Overall, it seems that loose monetary policy increases incomes of those at the bottom of the distribution but reduces their income relative to those at the top of the distribution. The paper also examines some post-Keynesian monetary policy rules to deal with inequality and finds them wanting in many respects. Going further, the paper argues that monetary policy is too a blunt instrument for reducing inequality and that reducing inequality needs to be the job fiscal policy, which is better suited to dealing with this problem and which has the political authority to deal with distributional problems. [ABSTRACT FROM AUTHOR]

Direct cash transfers to households during the COVID-19 pandemic, including relief checks and Child Tax Credit payments, were delayed by weeks for recipients without bank accounts and were not received by many non-filers who lacked the time or resources to complete necessary paperwork. A postal banking system has the potential to expand access to financial infrastructure and enable the rapid distribution of resources to households in need during economic downturns – often the same households that are currently excluded from the financial system. This paper examines the history of the US Postal Savings System and the feasibility of a return to postal banking using evidence on the socioeconomic and spatial patterns of financial exclusion. We find that postal banks would be well positioned to compete with both alternative and conventional financial institutions, address issues with physical branch access, and improve outreach to vulnerable populations. [ABSTRACT FROM AUTHOR]

Economists usually shy away from talking about power. They assume an economy comprised of many small and medium-sized firms, each competing for consumer dollars. This circumvents the problem of economic power. John Kenneth Galbraith, however, refused to ignore power. It stood at the center of his economics, and he saw it as a key reason the US economy thrived in the years following World War II (WWII). This chapter examines Galbraith's changing views regarding economic power. American Capitalism explains how countervailing power, or power on the other side of the market, solves the problem of economic power. In The New Industrial State, scientists and educated managers within the firm (the technostructure) mitigate the negative consequences of economic power wielded by large firms. The Affluent Society and Economics and the Public Purpose look to the government as the main check on corporate power. It does this through labor legislation or programs such as the New Deal and Fair Deal. This chapter then evaluates the different solutions Galbraith proffered to the problem of economic power. It contends that Galbraith got three things right when analyzing economic power. First, we no longer live in a world of scarcity due to oligopolistic firms. Second, capitalism was different in the post-WWII era because the US economy thrived and gains were shared widely. Third, Galbraith understood that power was unequally distributed – both between the public and private sectors and within the private sector itself. On the other hand, Galbraith was overly optimistic in believing the market economy or the public sector could counter corporate power. [ABSTRACT FROM AUTHOR]

Households with children face burdens that households without children don't face. Besides food, clothing, shelter and healthcare, childcare can easily run several thousand dollars each year. Historically, US economic and social policies have done little to help families with children. Until 2018, families with children were helped indirectly through tax exemptions for children and some child tax credits. These benefits mainly helped middle-income families in high tax brackets. Things changed with American Rescue Plan Act of 2021, which provided a refundable tax credit to all families with children ($3,600 annually for children under six and $3,000 for those six and older)—even families with no taxable income. This payment is like the child allowance programs that exist in nearly all nations. Our paper examines how the refundable child tax credit affected the economic condition of US households with children, and the impact of this credit on poverty and income inequality in the United States. We conclude with some suggestions for improving the refundable child credit so that it does a better job of helping families with children. [ABSTRACT FROM AUTHOR]