The Impact of Monetary Policy on Income Inequality in Türkiye: A Structural VAR Approach

This study investigates the impact of conventional monetary policy on income inequality in Türkiye. Using annual data from 1988 to 2021, we applied the long-run restricted Structural Vector Autoregression (SVAR) method developed by Blanchard and Quah (1989) to estimate the impact of monetary policy shocks on income inequality. The analysis results showed that contractionary monetary policy shocks reduced income inequality. Furthermore, the impact of monetary policy on income inequality is linked to the inflation rate and stock prices.