towards our aim in a sustained manner, in line with our commitment to symmetry. 2. how does monetary policy, then, relate to the issue of inequality? as is well known, income inequality has been rising for several decades in most advanced economies – more in some, less in others. there are some common drivers, including globalisation and skillbiased technological progress, as well as country - specific factors, of which changes in taxation is the most important. recently, the pandemic has hit the less well - off hardest and further amplified inequality. generally speaking, inequality is mainly explained by structural factors, and therefore policies other than monetary policy play a key role in addressing it. we know that monetary policy impacts inequality through two main channels, the income and wealth channels. concerning the income channel, it is critical to note that the wages and employment prospects of low - income households are typically more sensitive to business cycles. therefore, monetary 1 / 3 bis central bankers'speeches policy easing, by stimulating economic activity, and thus assisting in saving and creating jobs and increasing wages, does reduce income inequality. this has been the main effect after the previous crisis and in the present crisis. on the other hand, households ’ business and financial income are more responsive to monetary policy than labour income, and this impact of the income channel in monetary policy easing tends to benefit wealthier households more than low - income households. as to the wealth channel, monetary policy easing generally makes the life of borrowers easier, but can impact negatively on better - off households ’ savings. however, the overall net effect depends on the composition of household balance sheets. a fall in the interest rate affects different assets and liabilities differently, depending on their type and maturity. 3. after the global financial crisis, central banks had to embark on a prolonged period of monetary accommodation using unconventional measures that impact on the prices of longer - term assets. this gave rise to concerns about increasing inequality. several empirical studies have concluded that the overall effect of unconventional monetary policy measures on income and wealth inequality is small. 1 overall, the easing of monetary policy would seem to have somewhat diminished inequality in recent years in the euro area, especially via increased employment for lower - income households. after the financial and debt crisis, 12 million jobs were created in europe, and monetary policy significantly contributed to that progress. furthermore, it is clear that the cooperation between monetary and fiscal policy in the crisis response has helped reduce longterm job losses and bankruptcies, and therefore

contributed to the overall wellbeing of the public. monetary policy has not played a significant role in the evolution of income or wealth inequality in my home country, finland, either. forthcoming research by the bank of finland staff suggests that the transmission of monetary policy to households with different types of wealth and income profiles is rather similar to that observed in other countries. monetary easing seems to reduce unemployment most among low - income households, while also boosting the general wage level, which benefits proportionately more high - income households. however, it seems that, relative to the positive impact that monetary policy has on the macro - economy, both on growth and employment, the impact on inequality is nevertheless very small. in our neighbouring nordic country, sweden, the assessments have been similar. in the terms of reference for reviewing the riksbank ’ s monetary policy framework, the riksdag ’ s parliamentary committee on finance concluded that the distributional consequences of monetary policy since the global financial crisis have been small, and if anything, have ameliorated income differences through lower unemployment. the committee also concluded that the distributional effects were small. 2 in our review of the ecb ’ s monetary policy strategy, we have discussed the issue of inequality and the role employment should play in policymaking. of course, we adjust monetary policy depending to how the economy is doing, and labour market slack has always been an important part of that consideration. moreover, given differences in marginal propensities to consume across households, the distribution of income and wealth clearly affects the transmission of monetary policy. in the euro area, national policies determine labour market outcomes. however, monetary policy can support full employment without prejudice to price stability. in the presence of a flattened phillips curve, policies aiming at full employment are likely to have a moderate inflationary impact in the short term. under such circumstances, monetary policy can also help us get closer to full employment. in fact, considerations about labour - income and wealth inequality strengthen the case for a 2 / 3 bis central bankers'speeches “ lower for longer ” strategy, when monetary policy is constrained by the effective lower bound. this is to my understanding in line with considerations that featured prominently in the federal reserve ’ s recent framework review and have contributed also to the new ecb monetary policy strategy, of which president christine lagarde informed the public earlier today. 4. so, let me ask, on the basis of these reflections : what should one as a central banker think about inequality and inclusive