Template-Type: ReDIF-Paper 1.0
Author-Name: Lina El-Jahel 
Author-X-Name-First: Lina	
Author-X-Name-Last: El-Jahel
Author-Email: l.eljahel@auckland.ac.nz
Author-Workplace-Name: University of Auckland Business School
Author-Name: Robert MacCulloch
Author-X-Name-First: Robert 
Author-X-Name-Last: MacCulloch
Author-Email: r.macculloch@auckland.ac.nz
Author-Workplace-Name: University of Auckland Business School
Author-Name: Hamed Shafiee
Author-X-Name-First: Hamed	
Author-X-Name-Last: Shafiee
Author-Email: hamed.shafiee@productivity.govt.nz
Author-Workplace-Name: New Zealand Productivity Commission
Title: How does Monetary Policy affect welfare?
Abstract:  Models on the optimal design of monetary policy typically rely on a social welfare loss function defined over inflation and unemployment. Our estimates of such a function use measures of two different dimensions of well-being that have been distinguished by recent research. The first is Cantril’s ‘ladder-of-life’ question. The second captures the emotional quality of everyday experiences. Our Gallup World Poll sample includes one million people in 138 nations over 12 years. Unemployment and inflation reduce well-being, although the ratio of the size of the effect varies dramatically between 2 and 4.6, depending upon which dimension of well-being is chosen.
Length: 23 pages
Creation-Date: 2020-06
File-URL: https://motu-www.motu.org.nz/wpapers/20_06.pdf
Number: 20_06
Classification-JEL: E24, E31, E52, I31
Keywords: Social welfare; well-being; inflation; unemployment. 
Handle: RePEc:mtu:wpaper:20_06