Monetary policy and wage inequality in South Africa

The distributive consequences of monetary policy have been researched only recently and almost entirely in advanced economies. This paper sheds light on the effect conventional shocks wage distribution South Africa, where inequality – mostly driven by segmented labour market remains a large issue. Impulse response functions estimated from local projections show that significantly worsens to shocks. Wages top half distribution, benefit unanticipated expansions, are less responsive surprise contractions, remaining protected skill-biased technology strong unions.