Global Resources

Gender bias and central bank policy: employment and inflation reduction

Author: E. Braunstein, J. Heintz
Publisher: The International Working Group on Gender, Macroeconomics and International Economics
Publication Date: Jan 2006
Do shifting inflation rates have different impacts on men and women in employment? And how might maintaining competitive exchange rates counter-balance any negative impacts of inflation? This paper is based on a study exploring the gender impacts of the phenomenon in developing countries whereby central banks are increasingly turning to maintaining a low inflation rate as the central target of monetary policy with little consideration for how these changes will affect employment and other areas. The study finds that, in the majority of countries undergoing periods of declining inflation that are accompanied by a loss of formal employment., the ratio of women's to men's employment tends to decline. The study also find that countries that respond to inflation by raising real interest rates above the long-run trend are more likely to experience employment contractions. Maintaining competitive exchange rates seems to counterbalance the gender-biased effects of contractionary inflation reduction episodes, however.