This paper studies the effect of monetary policy on inflation along the income distribution in several euro area …. On the one hand, different consumption shares imply that inflation by high-income households responds less to monetary … its reaction to monetary policy, which imply that inflation by high-income households responds more to monetary policy. …

A popular argument in favour of price stability is that the inflation-tax burden would disproportionately fall on the … interest bearing assets (LAMP). We show that a combination of higher inflation and lower income taxes reduces inequality. When … we calibrate the share of constrained agents to fit the wealth Gini index for the US, the optimal inflation rate is above …