Redistribution Channel of Monetary Policy: Evidence from Bank Lending

Using the employer-employee survey data and the granular loan-level data from China, this paper explores the redistribution effect of monetary policy through bank lending. The main findings show that the expansionary monetary policy would reduce inequality through the sample bank lending, both within-firm and between-firm. The redistribution effect is stronger in less-developed areas, and in labor-intensive and financially constrained industries. We also find strong spill-over effects of the bank lending through the supplies chains.